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Income and Asset Reporting Flashcards

6 cards from real FAFSA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Income and Asset Reporting flashcards as text

  1. Which of the following is considered untaxed income for FAFSA purposes?

    Answer: Tax-exempt interest income

    Tax-exempt interest income is not included in AGI but must be reported as untaxed income on the FAFSA.

  2. How is a student's financial aid treated if they receive a scholarship that exceeds tuition costs?

    Answer: The excess may be counted as student income on the following year's FAFSA

    Scholarship amounts that exceed qualified education expenses (tuition, fees, books) may be reported as taxable income and could affect the next year's FAFSA.

  3. What FAFSA question addresses money paid on a student's behalf that is not reported elsewhere?

    Answer: Money paid on your behalf question

    The FAFSA includes a question about money paid on behalf of the student (such as a grandparent paying tuition directly) that is not reported elsewhere.

  4. How does a parent's 401(k) contribution (pre-tax) affect the FAFSA income calculation?

    Answer: It is added back to income as untaxed income

    Pre-tax 401(k) contributions are added back as untaxed income on the FAFSA because they were not subject to income tax.

  5. What is the asset protection allowance on the FAFSA?

    Answer: An amount of parent assets excluded from the SAI formula based on age

    The Asset Protection Allowance shields a portion of parent assets from the SAI calculation, with the amount varying based on the age of the older parent.

  6. How are HSA (Health Savings Account) balances treated on the FAFSA?

    Answer: Not reported as assets on FAFSA

    HSA balances are not reported as assets on the FAFSA; only HSA contributions made during the reporting year are added back as untaxed income.