I filled out the fasa last year for my daughter to go to college. She does have a job and earning her own money. My question is ...Should I let her file her own taxes ( claimed her last year as a dependent) and fill out the Fasa on her earnings? She is a freshman.

For FAFSA purposes, she is a dependant until age 24 regardless of whether or not she works. Her income will be taken into account as well.

So, you are saying that I will still need to file FASA in my name with her as a dependent right???

The FAFSA is always filed in the student's name, not the parent's. However, there is a section for parental information that will need to be filled out unless she is considered independent for financial aid purposes. In order to be considered independent, she'd have to be at least 24, married, a parent, a grad student, a veteran, or on active military duty. Or an orphan, but that's obviously not the case here... Unless she meets these requirements, they'll consider your income and assets as well as hers.

Filing income taxes is an entirely separate issue.

She files her own FAFSA, but has to include your financial information.

Exactly, and I'm a student so I can attest to this. There is one more reason to be considered/determined independent if you're under 24, and that's if a student has no contact with their parents, not an orphan etc but just no contact. I have a friend like this, both her parents do nothing for her, so with a few letters they allowed her to deemed independent. I know this isn't the case, but I wanted to add it for others who may be wondering. It's a process that's determined by FAFSA and someone's the school.

No contact is not a reason to be declared independant under DOE rules. The rules are quite specific and there has to be sufficient reason for the no contact such as physical or sexual abuse. It is suppose to be documented by professional like a physician or clery member. Not liking your parents doesnt suffice,.