FAFSA & DS cash for pay job?

[Nolcrest]

My DS has been working for his uncle for a couple of years. Sometimes he sweeps floors at his shop at other times he helps him with yard work and odds and end jobs. He only works a few hours a day, not every day and DS really enjoys this job because he is able to attend college full time and has flexibility with his hours at work.

My son is paid cash and therefore has never filed income taxes.

He makes enough money to just about pay his car expenses. He is an excellant student so I never really pushed for him to get a job elsewhere for more pay. This arrangement allows for him to study and participate on his hockey team when needed.

I'm starting to feel that he would benefit from getting a job that offers a steady paycheck and I'm concerned that this cash payment will somehow work against him when he transfers to a private college and needs financial aid/loans because he won't have an employment history.

He keeps telling me that if he works for a business he'll won't be making enough money to pay for parking, gas and car insurance but mostly the flexibility to work around his present college schedule.

When we complete the FAFSA form we complete it saying he "does not file", and that his income is zero.

What would be best for him? Would he qualify for more loans or aid if he had a low paying steady job rather than saying he has no income making him look like he's "lazy" not earning anything?

Thoughts?

 

[A Mickeyfan]

FAFSA is based on yours & his income. Adding income will only hurt his chance of getting any aid not help. As far as loans, he will still qualify for them, especially since they go by your income as well. He will not appear "lazy", he is a college student & not all of them work. Some are just full time students... there is nothing lazy about that. So don't worry about him not being on the books. He is correct in saying that after everything is deducted, he will not be making much. Let him continue to do as he is.. He is happy, he has a zero income & that helps with FAFSA

 

[MyGoofy26]

The FAFSA basically takes all of his money, and all of your money and throws it into this equation where a certain percent of his money plus a certain percent of your money equals the EFC. It's pretty much cut and dry, not like say a FICO score where there are a hundred little factors can change your number. So the FAFSA just says "this family can afford to pay this much" and the school takes it from there. There are plenty of kids not working their way through school. I don't think it's necessarily a negative - I'm sure that school officials would understand the rationale behind a family wanting their child to focus on academics, not working part time at the mall. I've never heard of a university just assuming a student is "lazy" and penalize them for not holding a job - they base the decision on need (how much or how little the student and his/her family makes) and not based on factors such as assuming that a student must be lazy.

 

[clh2]

Just a thought - although not related to financial aid.

Your DS should get a job that is "on the books" whether it is with his uncle or somewhere else.

When he fills out job applications, he won't be able to claim this as a having a job. If I were the person interviewing our DS as a potential job candidate, for an entry level job, I dono't think I would be impressed with him - he will have no track record, no job-related references to say something nice about him, that he shows up, tries hard,picks things up quickly etc.

JMHO...

 

[JoiseyMom]

Just a thought - although not related to financial aid.

Your DS should get a job that is "on the books" whether it is with his uncle or somewhere else.

When he fills out job applications, he won't be able to claim this as a having a job. If I were the person interviewing our DS as a potential job candidate, for an entry level job, I dono't think I would be impressed with him - he will have no track record, no job-related references to say something nice about him, that he shows up, tries hard,picks things up quickly etc.

JMHO...

Excuse me, but you are wrong. He can put down any work he has done off the books. That is real life experience. They call the job to check references, not the IRS.

Why would you think he couldn't put this job down on a job application?

 

[swilshire]

I'm not the IRS, but someone should mention that he's breaking the law. Sure he won't have a lot left after deductions. Do you? Legally he's required to report any income. If his income is low, he'll owe no income taxes. He should still be paying social security on his wages.

I'm sure his uncle is a nice guy, but working "off the books" also avoids coverage by workers compensation and other laws that protect the worker.

Especially on tax day, I resent paying my "fair share" when so many others are not. My kids work and pay taxes, as do I. Why do some feel that they are excluded from the laws?

Sheila

 

[JoiseyMom]

I'm not the IRS, but someone should mention that he's breaking the law. Sure he won't have a lot left after deductions. Do you? Legally he's required to report any income. If his income is low, he'll owe no income taxes. He should still be paying social security on his wages.

I'm sure his uncle is a nice guy, but working "off the books" also avoids coverage by workers compensation and other laws that protect the worker.

Especially on tax day, I resent paying my "fair share" when so many others are not. My kids work and pay taxes, as do I. Why do some feel that they are excluded from the laws?

Sheila

Yes, he should, but being a student, and making very little money, anything he would have paid into Fed taxes, he would have gotten it all back. So his not working on the books isn't effecting you. The little money that would have gone into social security isn't going to be enough to effect him later on either. Honestly I don't think it is a big deal. I think a bigger problem in this country is all the loop poles for the very wealthy, who pay less then the middle class do.

 

[jennifer293]

I know someone will correct me if I am wrong here and please do!!


If the uncle is paying him cash, I can about bet the uncle is not turning it in on his taxes as money paid out so therefore there is no 1099 being reported to the IRS on his nephew. If he makes under 600.00 in a calendar year then he does not have to report him, but if it is over that then the uncle is breaking the law as well right? I don't personally care one way or the other and I am not trying to point out "law breakers" ,but I would hate to see either be penalized for it!!

 

[JoiseyMom]

I know someone will correct me if I am wrong here and please do!!


If the uncle is paying him cash, I can about bet the uncle is not turning it in on his taxes as money paid out so therefore there is no 1099 being reported to the IRS on his nephew. If he makes under 600.00 in a calendar year then he does not have to report him, but if it is over that then the uncle is breaking the law as well right? I don't personally care one way or the other and I am not trying to point out "law breakers" ,but I would hate to see either be penalized for it!!

Yes, if he makes $600 or more than his uncle is supposed to give him a 1099. But since his uncle is paying him off the books he isn't going to give him one. If the uncle was going to give him a 1099, then he may as well pay him off the books.

 

[swilshire]

Yes, he should, but being a student, and making very little money, anything he would have paid into Fed taxes, he would have gotten it all back.

I didn't mean to single you out, but I've seen too many posts lately about people who are ignoring the tax laws and proud of it. I started paying taxes at about age 13 (which was a VERY long time ago, believe me) when I was a carhop at a local restaurant. Your son's little bit doesn't sound like much, but multiply him by many others, and add in the worse offenders who are adults and work completely off the books. I could mention illegals, but that would probably be considered a politcal comment inappropriate for the board.

I agree that tax breaks for the rich are an even bigger problem, but that too becomes a politcal discussion.

As for the social security he isn't paying, the system is already going bust. Not sure I can count on it when I retire. Every person not paying their fair share in just makes it worse.

Each person has to make choices that make them feel comfortable. I'm just expressing what I think is fair. Others obviously disagree.

Sheila

 

[A Mickeyfan]

I didn't mean to single you out, but I've seen too many posts lately about people who are ignoring the tax laws and proud of it. I started paying taxes at about age 13 (which was a VERY long time ago, believe me) when I was a carhop at a local restaurant. Your son's little bit doesn't sound like much, but multiply him by many others, and add in the worse offenders who are adults and work completely off the books. I could mention illegals, but that would probably be considered a politcal comment inappropriate for the board.

I agree that tax breaks for the rich are an even bigger problem, but that too becomes a politcal discussion.

As for the social security he isn't paying, the system is already going bust. Not sure I can count on it when I retire. Every person not paying their fair share in just makes it worse.

Each person has to make choices that make them feel comfortable. I'm just expressing what I think is fair. Others obviously disagree.

Sheila

Where on Earth did you live that they allowed 13 yr old to work legally!!! I have never in my life heard of that. Many places will not hire you until you are 15 (some will do at 14 if you know someone that works there). As far as being illegal, he is working for his uncle, it is family & that is not illegal. What about kids that babysit... that isn't reported income. What about allowance for doing extra things around someone's home...that is not illegal. My son does some major things around my Mom's house when we go visit her. He is now 19 & there have been times that she paid him up to $100 for some of the work he had done for her. Was he to claim that NO... she didn't report anywhere that she paid him. Do you see what I am saying. There are somethings that really aren't considered illegal. In the instance of an uncle-nephew relationship & the uncle isn't claiming that the newphew is an employee, why should the nephew be paying tax. Now, if the uncle was claiming that salary as a deduction on his tax, yes...it should be reported other than that, there is no reason.
If you want to talk illegal, talk of these illegal immigrants that are here working off the books, trying to collect welfare & food stamps, free health care.. now they are protesting because they want social security rights etc.. yet they have made no attempt to become a legal citizen..that is what you call illegal, not working off the books for your uncle.

 

[swilshire]

Where on Earth did you live that they allowed 13 yr old to work legally!!.

I DID mention that I'm OLD! In fact, I distinctly remember that I had to wait until I turned 13, because the restaurant wouldn't hire 12yos. I don't know if that was the law or just their policy. I lived in Tennessee, but I think that was the norm 35 years ago.

It's a whole different ballgame now. My daughter supervised seasonal help and they tried to avoid hiring 15 year olds because there were so many more rules than for the 16yos. They did take them when they were desperate. My son just got a job in food service and there are lots of things that he can do at 18 that the 17yos can't do.

I probably wouldn't have considered the work for the uncle as a "real job" either had it not been for the heading on the OP and the various references to the job. Certainly, working for Grandma who is going to give you $100 whether you do much or not falls into the category of a gift.

I don't disagree with your other points either. It all adds up and on tax day, hurts even more than usual.

Sheila

 

[englishteacha]

My high school job was babysitting for the neighbor's kids, and watching my nephew in the summer for my sister. At $2-5 an hour, I didn't make a whole lot, and I never filed taxes until I got my first "real" job as a chambermaid at a hotel. However, I worked my tail off babysitting, and the families I babysat for gave me great references for my "real" job.

I worked in the financial aid office in college and answered many a question about the FAFSA. Basically, as stated above, there's a formula that figures in the family income and the student's income and figures out how much the family should be able to contribute. Sometimes, however, this figure is way higher than is practical for a family. If that happens, you can talk to the financial aid office at your school and they can see what they can do to help you.