Most articles about how to complete the FAFSA will advise: file early (as soon as possible after the form goes live on Jan 1 for the following school year) because the Federal funding at each college is first-come, first-serve.
The NYT‘s The Choice, in its introduction to Seeking Your Questions on the FAFSA, quotes Mark Kantrowitz:
It is best to file the Fafsa as soon as possible after Jan. 1.
Two states, Oregon and Connecticut, have deadlines for state grants in February, and a dozen have deadlines in March.
Six states provide the state grants on a first come first served basis until the money runs out. (The Fafsa lists them as “until funds are depleted.”)
A number of advisors write: file your taxes first, and link to the FAFSA. The IRS link will complete relevant parts of the FAFSA with the necessary tax return information (such as Adjusted Gross Income). Plus the link verifies your FAFSA so it won’t require verification by the college financial aid office.
From Wise Choice, Simplifying the FAFSA: Use the IRS Retrieval Tool:
If you are a new or returning user, be sure to take a look at the IRS Retrieval Tool. Instead of having to pull all of your financial papers together again, the tool actually allows you to pull information directly from the IRS and your tax forms and imports them into the FAFSA form. This not only reduces the headache of basically preparing another return, but ensures more accurate reporting from year to year, as well.
Here, of course, is the catch: most of the tax-related information required for your tax return will not arrive in your mailbox until February.
Mark Kantrowitz, quoted in the Choice link above, provides a complete column answering this question, “How do I file the FAFSA in January when tax returns can’t be filed that early?”
Do not wait until you have filed your federal income tax returns to submit the FAFSA. Instead, use estimated numbers to complete the FAFSA. You will have an opportunity to correct any errors later and will be required to update the application after your taxes are filed. Be sure to check the “will file” box. The US Department of Education will send an email reminder in April to update the FAFSA information after your federal income tax returns have been filed.
For more Q&A on the FAFSA, dive into the full series of seven Choice columns linked here.
Following Kantro’s advice, we’re using non-official financial information to get an early draft of our return for the numbers we need for the FAFSA. Once we’ve received the official 1099s, et. al., we’ll complete the return and update the FAFSA as needed.
If you’ve not yet started, now’s the time. Get your PINs first; one each for the student and for the parent, these act as electronic signatures for the form. If you file online — as all advisors recommend — colleges will receive the processed form within days.