If your child is currently a sophomore in high school, making a few last-minute tax moves this year could be the key to maximizing college financial aid down the line.
Changes to the Free Application for Federal Student Aid (FAFSA) that kicked in this year allow families to use data from the prior year's return when they file. So a student starting college in the 2018-19 academic year can file the FAFSA as early as October 2017, using income data from 2016.
(Asset values are reported at the time you file the FAFSA, so you have until next fall to make changes there.)
Reducing taxable income for this year could benefit you under FAFSA rules, which gives more weight to income than assets in determining a family's expected contribution toward the cost of college. Between 22 and 47 percent of parents' discretionary income, and 50 percent of the student's income, could be allocated to cover college bills, according to the formula.