The FAFSA, in case you aren't aware, is the form you have to fill out in the US if you're hoping to receive any need-based financial aid for college. How much aid you qualify for is based on how much your parents earn. The FAFSA asks specifically for taxable income, just as any tax forms do. My family had no taxable income. My parents didn't really understand taxes, for that matter, though I didn't know that at the time. We lived exclusively off nontaxable government aid: a combination of veterans disability benefits and social security. It was a sizable income though. All totaled up, our household netted about $120k per annum. Seriously. I know.
When my mother filled out the FAFSA for me, she filled it out correctly the first time with $0 as the taxable income. The results it yielded said that I wouldn't be expected to pay anything out of pocket toward tuition. My mother said, "Well that can't be right. We're not that poor." I can understand why she was confused. We really weren't poor, no matter how often she swore we were. Then she filled it out again as though our total income (or some number along those lines -- it's not like we had tax forms she could reference) were taxable. The FAFSA said I no longer qualified for need-based aid of any kind. That was version she submitted. When the formal aid package came from my university and said I would receive a sizable merit-based scholarship and no need-based aid whatsoever, my mother was outraged and told me to write up an appeal. It yielded me a $500 annual "hardship grant," as my mother called it. It was a comically small amount next to tuition. She seemed content.
This all happened back when my mother was still insistent my education would be taken care of and I didn't need to worry or talk to her about money under any circumstances. It was also back before I knew better.