The FAFSA (Free Application for Federal Student Aid) requires a lot of financial information from students and parents, which can be intimidating. In most cases, though, completing the FAFSA is actually not a complicated process.

“The FAFSA can seem overwhelming, but at the end of the day, it is quite straightforward,” says Lindsay Fried, a certified educational planner at Simply Admissions.

Still, it’s smart to be prepared. Here’s what to know prior to completing the FAFSA and what to do while you’re filling out the form to ensure your income is reported correctly.

Identify Whose Income Will Be Reported

While students ages 24 and up are considered independent and report solely their income (and their spouse’s income, if married), most college students are considered dependent students. That means they’ll need to report not only their income but also their parents’ income.

When parents are married and file a joint income tax return, the joint income tax return is used for the FAFSA. If a student’s parents are divorced, separated, or were never married and do not live together, complete the FAFSA using the information of the parent the student lived with more during the past 12 months. If the parents do live together, report both parents’ income, even if they are not married.

Just be aware that if a parent is remarried or married to someone who is not the student’s parent, their spouse’s financial information will also need to be reported.

Confirm Your Tax Filings are Current

While it’s not a requirement to be up to date with your taxes, it will make the FAFSA process a whole lot easier.

“The FAFSA gets completed with your taxes from two years ago. Also known as the ‘prior-prior year,’” says Tamika Thomas, client services manager at My College Planning Team. “If your child is going to college in 2023, your FAFSA is done with your 2021 taxes.”

If your prior-prior year tax return has been filed, you’ll be able to transfer the information (known as Federal Tax Information or FTI) into your FAFSA via a direct data exchange with the IRS. This system replaces the IRS Data Retrieval Tool (DRT). If your taxes have not been filed, you’ll need to enter the information manually.

Gather Financial Documents

If you’re able to use the direct data exchange, you won’t need your tax return, but you may want it on hand for reference. If you’re not using the direct data exchange, you’ll want to have your tax return from the prior-prior year so you can enter the information manually.

If you have not filed your prior-prior year taxes, you’re still able to complete the FAFSA. “You can use your W-2s or pay stubs,” says Christine Sylvain, executive director at Path to College Fellowship. “If you are self-employed, you can submit a signed statement saying how much you made.” She does caution that not having a tax return makes the process more difficult.

Whether you’re completing the FAFSA manually or using the direct data exchange, you’ll need documents to report untaxed income such as workers’ compensation, disability benefits, or tax-exempt interest income. You’ll also need to report the amount of money in any checking, savings, and investment accounts with the exception of retirement accounts such as a 401(k), IRA, pension fund, or other qualified annuity.

Money in checking, savings, and non-retirement investment accounts is not counted as income, but is factored into a family’s Student Aid Index (SAI), which has replaced the Expected Family Contribution (EFC). “Approximately 20% of savings, investments, and assets in the student’s name are expected to go toward their college expenses,” says Fried. About 5.64% of unprotected assets in the parent’s name are expected to be contributed to college costs, Fried adds.

Complete the FAFSA with the Direct Data Exchange or Manually

If you plan to use the direct data exchange, complete the FAFSA online at If you haven’t filed your taxes for the prior-prior year or if the direct data exchange is not available, then you can still complete the FAFSA online but you will need to enter your financial information manually.

Ask for Help

If you run into a problem, there’s plenty of help available and much of it is free. “ is a great resource for free help on the FAFSA and questions about financial aid,” says Thomas. She adds, “Many states have a government agency that will help with financial aid questions and FAFSA completion.” Searching for “FAFSA help” and your state’s name should pull up your agency.

You may also get free help from TRIO, which is a federal program that supports students—specifically low-income and first-generation students as well as those with disabilities—through the financial aid application process. If you think you may qualify for this program, discuss it with your high school counselor and apply online.

Sylvain has one piece of financial advice she’d give to anyone hoping to receive financial aid: “Complete the FAFSA early,” she says. There are some financial aid funds that are first come, first served. “[The FAFSA] opens on October 1, and the earlier you get in line to receive money, the better.” If your financial documents are in order, completing the FAFSA can be a fairly quick and painless process. If your situation is more complicated, beginning early will give you time to work through any issues that arise and ensure that you qualify for all of the federal aid you deserve.

About the Author

Jodi Okun is founder and president of College Financial Aid Advisors. She has been featured in The Wall Street Journal, Mashable, US News & Education and The Huffington Post. The opinions expressed in this article are Jodi’s and do not necessarily reflect the opinions of Discover® Student Loans.

FAFSA® is a registered trademark of the US Department of Education and is not affiliated with Discover® Student Loans.

Discover® Student Loans encourages you to consult a financial planner before making financial transactions. You should also consult a tax professional for tax advice.

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