<p>I am wondering about this. My son has applied to a very selective school that “meets full need” as determined by them (via the Profile and their own methodology). I, too, am self-employed. My GROSS revenue is about $130,000, but my deductions are “real” - things I actually have to pay for to run the business. Office rent, supplies, part-time help, etc. Things that are truly out-of-pocket. The only things that seem to me appropriate to add back are things like mileage, depreciation, etc. - that are not actually paid ‘out of pocket’, but are just paper expenses.</p>
<p>My AGI is about $52,000 and we qualify for a small Pell (FAFSA efc = $5,038). We have basically no assets, home is about break-even, no substantial equity (we actually only own a 1/2 interest in the house, which has a big mortgage - I put down the market value of our 1/2 interest and 1/2 of the mortgage, which actually puts us underwater; we are technically/legally responsible for the whole mortgage, but we only pay 1/2, so that’s what I put down). No substantial savings or even retirement accounts. We live in a very expensive place (some schools take that into account).</p>
<p>So I am wondering what they will likely “add back” for the purpose of determining our true need. I figure maybe a couple hundred in mileage expenses (I only take off for business-related trips to/from the office, NOT for my daily home-office commute), not sure what else. It sure wouldn’t be fair if they add back things I actually have to pay, like phone and copier charges, insurance, rent, supplies, etc.</p>
<p>Anyone have a similar situation? Do you know what they are likely to add back? How about self-employed health insurance? That’s pretty big, and I didn’t include it in my “medical” costs since it is already factored into the AGI.</p>
<p>One more question. My husband is, honestly, a bit of a deadbeat. He has his own business, which used to be a little profitable until we moved. For about a few years he had a loss, but last year made more than he spent. Because of the prior years’ losses, however, his ‘net income’ was reduced to zero by carrying forward some of the loss that had been disallowed last year. I know they add back losses that go into the figure (forget exactly which line it is, line 12? maybe) on the front of the 1040 (like last year, my net from Sch. C was, say, $60K, he had a $2K loss, so the line 12 amount was $58K - I understand they would add that $2K back). But what about a loss that reduces the Schedule C net amount from, say, $2K to $0? So the amount carried forward onto line 12, from his Sch. C, is 0. Would they go into the Sch. C to determine whether there was an old loss contributing to that 0, and add it back, or not?</p>
<p>And, will they say, he should get a job, and increase our contribution because of that? I doubt he could get a job, honestly, he is over 50 and hasn’t worked (except in his own business) since he was about 21. I didn’t put down that he was a “dislocated worker” because while the recession did have a large impact on his business, more of it was probably due to moving and having to re-establish himself in a new location.</p>
<p>OK, these are tough questions, I know, but I am just wondering whether our “true need” is likely to be considered a LOT higher than our FAFSA efc, or maybe only a little higher. Anyone know, or have a similar situation?</p>
Other than that we don’t have any significant assets.</p>