There are several, but one example is your IRA (Individual Retirement Account). You can actually use your yearly contribution to your IRA to help with lowering your EFC (expected family contribution) and shelter money from the prying eyes of the college FAO (financial aid officer).
From January 2nd to April 15th the IRS (Internal Revenue Service) allows you to make contributions to your IRA fund for either tax year (2013 or 2014). If you are married and filing jointly, you can make a contribution of up to $11,000 (up to $13,000 if you’re over the age of 50) for fiscal year 2013. At the same time, you can make the same yearly contributions (up to $11,000 or $13,000 respectively) to your IRA for fiscal year 2014 (see IRS information for more details). By doing this, you will shelter $22,000 (or $26,000 if you’re over 50) from your FAO. The difference can be hundreds of dollars in additional financial aid, plus the added reduction in taxes you’ll receive.
The key to sheltering is that you must make these contributions BEFORE you fill out your tax return. Many make the mistake of filling out their tax returns first, then later making an IRA contribution. Several of the online tax services (Turbo Tax, H&R Block, TaxAct, etc.) allow you to run scenarios with your tax returns before filing. Take advantage of these and determine how much you can afford to shelter with your IRA contribution. Again, do it BEFORE submitting your tax return.
Want to know other tips, ideas and strategies? Download the free financial aid manual at MaxFinAid.org.