2

I lived and worked in London (even though I'm an American) for the last 5 years, and now I'll be heading back to the states.

My children are about to start college and I have money saved in an English bank account. They heard that the FAFSA asks a question about how much money you have stored in your checking/savings accounts. So do I need to report the amount stored in a foreign account too?

I filed all my tax returns when I was abroad so they know how much I made (just not how much I saved). Do I still need to declare it, even though I might not intend to use this money to help my kids through college?

My kids are American and will be going to school in the USA.

4

I filed all my tax returns when I was abroad so they know how much I made (just not how much I saved).

I smell problems here. If you were compliant wrt to your filings, you must have filed FBAR forms and form 8938. Even if you were below the threshold for form 8938, you will probably be above it when you move back to the US - the threshold for people living in the US is much lower.

Do I still need to declare it, even though I might not intend to use this money to help my kids through college?

I believe so. Here's what they want:

    88. Total current balance of cash, savings, and checking accounts.
        Include the balance of your parents’ cash, savings, and checking
        accounts as of the date the FAFSA is completed.
        Do not include student financial aid.

Nothing there suggests that it is only limited to the accounts in the US or to the money you intend to use to help your kids through college.

  • A tax accountant for the company helped me file my famly taxes so he I assume he filed the right forms. Sounds like I need to report the savings on FAFSA so I dont break thelaw. Thanks. – Samuel May 19 '13 at 3:23
  • 1
    @Samuel do the forms I linked to look familiar? Don't assume, its your neck on the line and the penalties for not filing these form are horrific. – littleadv May 19 '13 at 3:25
  • I talked with the accountant and he showed me copies of the forms so I guess I just didnt remember. Looks like I havent broken any laws! – Samuel May 19 '13 at 15:50
2

If they allowed people to skip reporting the funds "even though I might not intend to use this money to help my kids through college", then children of a Billionaire would be eligible for financial aid.

In addition you might have reported all your income to the IRS, but the rest of the government isn't able to see that information.

  • 2
    IIRC for FAFSA they're required to provide copies of the tax filings, so in this case the rest of the government is able to see that information. – littleadv May 19 '13 at 3:24
  • Yes they can see some tax forms, but only for the recent years. Money stashed in an account that doesn't generate a taxable presence would not be on those forms. – mhoran_psprep May 19 '13 at 14:16
  • 1
    well, that's where you're wrong. See the forms I linked to in my answer. Specifically form 8938 which is part of the 1040 package (FBAR is not). – littleadv May 19 '13 at 20:57

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.