Keeping Good Records for Taxes and FAFSA

Good records do double duty: they win court arguments and simplify taxes and financial aid forms. Here’s a practical system that keeps you ready for both April 15 and FAFSA season.

What to save. Keep copies of orders, SDU payment histories, your reimbursement ledger with EOBs and receipts, childcare contracts, health insurance premium proofs, and calendars showing parenting time. For taxes, save W‑2s/1099s, childcare statements, and any 1095 health insurance forms. For FAFSA, keep records that show who paid child support and who the student lived with most during the prior 12 months.

Who claims the child. Your order may specify which parent claims the child for tax purposes, often tied to being current on support. Remember: the IRS requires Form 8332 if the noncustodial parent claims the child. Coordinate early; mismatches trigger audits. Claiming the child involves credits like the Child Tax Credit or Earned Income Tax Credit—review current IRS rules before filing.

Child support and taxes. Child support received is not taxable income to the recipient, and child support paid is not deductible for the payer. Don’t misclassify payments. Keep SDU statements to prove amounts in case of IRS inquiries related to dependency claims or the Child Care Credit (which depends on who paid for care and the child’s residence).

FAFSA basics. For FAFSA, “custodial parent” means the parent with whom the student lived the most in the past 12 months—not the one who claims the child on taxes. FAFSA asks for child support received, which can affect aid; keep your SDU summaries by calendar year. If you remarried, FAFSA includes the stepparent’s income, too, plan accordingly.

Organize digitally. Use a dedicated cloud folder with subfolders: Orders, SDU Statements, Reimbursements, Taxes, FAFSA. Name files with dates and vendors (“2025‑02‑EOB‑Orthodontics‑$220.pdf”). Scan paper receipts immediately faded receipts lose value. Back up to a second location or external drive.

Reconciliation routine. Quarterly, reconcile your ledger with SDU postings. For taxes, collect childcare provider EINs and amounts paid. For FAFSA, prepare a one‑page summary listing total support received and the student’s residence nights. These summaries reduce last‑minute scrambles and errors on forms.

When disputes arise. If the other parent claims the child contrary to the order, speak to a tax professional about the best remedy (sometimes a paper return asserting your claim with Form 8332 and documentation). Don’t argue online, the IRS resolves tax claims, not family court. For FAFSA disputes, follow the form’s definitions and keep proof of residence nights.

Bottom line. A tidy digital file and a quarterly routine keep you tax‑ and FAFSA‑ready and strengthen your position in court.

FAFSA timing tip. The FAFSA now uses “prior‑prior year” tax information. Keep that year’s SDU statements handy and a simple summary of child support received. For divorced/separated parents, FAFSA looks at the parent with whom the student lived more in the last 12 months; if time is equal, the higher‑income parent’s info is used. Planning ahead prevents last‑minute scrambles.