A family could time the payment of their itemized deductions in order to pay more federal income tax during college years. Assuming the taxes will have to be paid anyway, paying them during college years allows for a bigger tax allowance, in return, increasing financial aid eligibility.

Specific Details

The parents reduced their income $5,000 by timing itemized deductions. Since the parents income was assessed at 47% the increased tax allowance may increase the childs financial aid eligibility by $2,350 ($5,000 x 47%).

Potential Savings

If you are in a financial aid income assessment rate of 47%, you could increase your financial aid eligibility up to $470 for every $1,000 paid in taxes by timing itemized deductions.