CSS/PROFILE Help for an International Student

Paying for College
1

<p>Good evening!
I have some questions regarding the CSS/PROFILE application, and I would appreciate if anyone can help me fill some questions.</p>

<p>Okay so first let me explain my situation.
My dad owns a small business, and my mother is unemployed. So basically the business of my dad is the one that sustains our family.
The NET income of the business is the GROSS income that my family receives, which this year is predicted to be of approximately $39k, or a little less. This is the only source of income my family receives, and the GROSS income of the business this year is predicted to be around $100k. </p>

<p>So I'm having troubles filling these questions and I would appreciate if anyone can tell me what I should put in any of them. </p>

<ol>
<li>Enter the wages, salaries, commissions, and tips your parents received during their country's most recent tax year.<br></li>
<li>Enter the amount of interest and dividend income your parents earned during their country's most recent tax year.</li>
<li>Enter your parents' net income from business, farm, rents, royalties, partnerships, estates, trusts, etc. during their country's most recent tax year.<br></li>
<li>Enter the amount of income your parents were or will be required to pay taxes on during their country's most recent tax year.</li>
<li>Enter the amount your parents paid for all taxes, mandatory withholdings, and set-asides during their country's most recent tax year. Include income taxes, state and local taxes, levies, and mandatory retirement payments. (Itemize the sources and amounts in Explanations/Special Circumstances (ES).)<br></li>
<li>Enter the income parent 1 earned or expects to earn from work during his or her country's most recent tax year. (Parent 1 is the parent you entered in PD-105, which is my dad) </li>
<li>Enter your parents' total household income from last year (should this be the gross income of the business or the net income?)</li>
<li>How much are your parents' other assets worth? (Should a car be included here? Its the only thing that can be considered other asset since my parents don't own jewelry, artworks, etc.)</li>
</ol>

<p>Thank you!!</p>

2

<p>anyonee? :)</p>

3

<p>Do you have a tax return from the 2012 tax year? If so, use that as a basis, and adjust for increases in income since then.</p>

4

<p>But you don’t understand. I’m having trouble understanding that kind of questions. I mean, should the net income go on my parent 1 income, or should it go on wages, or on dividends? I don’t know what to put, which is why I’m asking someone here to explain me those questions in detail, if they can</p>

5

<p>You will make someone happy :), anyone? lol</p>

6

<p>Whether or not your parents own a business, don’t they file personal income tax forms? That is the info you are looking for - 1040 forms, which they filed if they made a profit.</p>

<p>Your parents likely have a tax advisor or accountant - you could set up an appointment with them if you are still confused.</p>

<p>If you are international, most countries should require the equivalent of a 1040, personal income tax form to be filed even if there is a small business.</p>

<p>If the small business is not registered and no taxes are paid, that opens up a can of worms (is an issue). You could also call your college of choice’s financial aid office for help.</p>

<p>My experience with international students at the state school I work at, is that most pay 100% of tuition and therefore don’t have this issue.</p>

7

<p>I’ll take a stab at some things but can’t your parents assist with you understanding this?</p>

<ol>
<li>Appears to be zero if all income is from the business.</li>
<li>Do your parents own stocks where they get dividends or have savings accounts that earn interest?</li>
<li>Appears to be $39k from what you have said. But what are the $61k of deductions/costs that reduce the $100k gross to $39k net?</li>
<li>We don’t know how taxes work in your country. Did your parents file a return for the most recent tax year? If so, look at the return.</li>
<li>Seems pretty self explanatory and we don’t know how taxes or retirement savings work in your country.</li>
<li>Not sure if business income is included in this.</li>
<li>Typically would be the net income but again I’m wondering about the $61k difference.</li>
<li>Says other assets. Other than what? What were the previous asset questions? I’m not familar with the profile questions.</li>
</ol>

8

<p>@annoyingdad</p>

<p>Okay! First off my family only presents a tax return for the business. They do not present a tax return for the family because they put all of our expenses and such on the business tax form. It’s really complicated to explain…</p>

<ol>
<li>Okay</li>
<li>No, so I guess it will be 0 again.</li>
<li>Okay, and those $61k are expenses from the BUSINESS: salaries for workers, rent for local, administrative expenses, gasoline, etc. </li>
<li>I don’t understand this question… </li>
<li>Yeah it is; I apologize.</li>
<li>Is it the net income we suppose he will win next year?</li>
<li>I already explained.</li>
<li>Other assets are investments, lands, account savings, and other stuff but things related to cars or such aren’t mentioned</li>
</ol>

9

<p>Guille…my gut feeling is your family is going to need to document every nickel of that $61,000 in business expenses. Be prepared to do so. Business owners here find that many “business expenses” are added back in as income at schools using the profile. It is very likely that your family will be asked to provide their business return from your country.</p>

10

<p>That I can do. I am not worried because I’m not lying on that part, but again what does that has to do with anything?<br>
You americans waste like a thousand dollars on food each week; it’s not like that is my case.</p>

<p>Going back to this question:
4. Enter the amount of income your parents were or will be required to pay taxes on during their country’s most recent tax year.</p>

<p>My parents do not pay taxes for their own; it is because they only present a tax form for the business and they punt the faimly income and expensed added to the business. Everyone can read that here <a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/1564056-tax-form-problem-financial-aid.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/1564056-tax-form-problem-financial-aid.html&lt;/a&gt;&lt;/p&gt;

<p>So they do not pay taxes for them, but they do pay taxes for the business. Should I put the taxes they will pay for the business? or is that also considered a business expense?</p>

11

<p><em>bump</em> I apologize if I annoyed anyone but I’m just having a hard time here. I KNOW it will be hard for me to prove all this because my dad has his own business, but I’ll do my best and honest try.</p>

<p>Can anyone help me?</p>

12

<p>You answer the questions as conservatively as you can, and in your explanation write out exactly what you have. Your parents income source is a business that is family owned that generated $100K, but only $39K went to the family. The value of that business if sold is $X. The other questions about dividends, interst has to do with other assets such as stocks, savings accounts that your parents might have, if they so have. It is highly likely, most certainly, in fact, that the tax return for the business is going to have to be submitted, and the college fin aid office will decide how to value the business and make the determination if the business income not reported as family income has to be added back in as family income. </p>

<p>It gets complicated when there is a business involved even if the student/family/business/ returns are all US. Different schools will assess things in different ways, and a lot depends upon the type of business and the precedent the school has used with that category, with professional judgement used for things very different with no precedence. </p>

<p>“You americans waste like a thousand dollars on food each week; it’s not like that is my case.”</p>

<p>I don’t know what that statement has to do with anything else in your posts and it is very insulting. There are people in your country that likely waste food too, In some countries, when food is sent for relief purposes by the UN, by the US, other countries and relief organizations, it gets sabotages, confiscated. Waste is hardly the word for it. </p>

<p>I have a large family, and for many years, i wasted very, very little food and planned each mean carefully. I still work at a Soup Kitchen and Food Pantry on a volunteer basis, making trays of food for dinners, and my kids work and have worked there as well. Many food drives to keep the food stocks for those who find it difficult to feed them selves. I’ve also worked on Meals on Wheels, delivering food, as have many of my acquaintances, neighbors, friends and fellow community members. You are insulting all of us when you make a stupid remark like that so out of context. Since that is so important to you to stick in there for no reason at all, why don’t you stay in your own country or find another place that you don’t feel wastes so much food?</p>

13

<p>Yes, I know. I didn’t mean to say that stuff but I just got frustrated that I just asked people on here to voluntairly help me answer the questions I mentioned above and what I have got, except for one person, are things that say that I will probably not receive financial aid. Things like: “what happens to that money? you are going to have a trouble showing that”. That’s the kind of thing I think people are trying to say indirectly here, and I feel those remarks discouraging. I just got frustrated that nobody just tried to answer those questions, but I know that was out of hand so I apologize. I know the USA is a lot times better than my country. I’m sorry.</p>

<p>Regarding what you said, I can also show balance sheet and the account status of the 2012 year. Just you get an idea, the business my dad owns is a public-transportation system. He owns 3 buses which make daily trips from here to Tapachula, Mexico.
So many, many of the expenses of the business go towards maintainance of the buses: gasoline, mechanical stuff, etc. My dad spends like $3000 each month only on gasoline.
How exactly can I know if this will present much of a problem when I present tax forms and such?</p>

14

<p>You need to ask these quesitons of the financial aid office of that school. But most importantly, you need to specifically ask them the questions you first asked, with the info you gave. </p>

<p>Any student, US students included, whose family own a business or some part of a businees or some other than standard holdings, is very likely to have trouble with the PROFILE, because the form really delves into how the business is structured and often adds back deductions, expenses, and values the business as an asset according to THEIR rules, not what you perceive the values and deductions. Sometimes it is outrageous when the business comprises of adhoc services, and the expenses are all needed in order to bring in the money. Then you have to appeal and show proof and go through a lot of trouble.</p>

<p>But you are not there yet. What you need to convey to the financial aid office is that your family business is what provides income to your family and that income is a net $39K. Your family pays no taxes so they get no tax credits. A parent, I assume, owns the business or a part of it, and the value of that business if sold, all assts, like furniture, inventory, supplies have to be estimated as what your family could possible get if they wanted to get rid of it all to someone. And that is an asset. </p>

<p>So: 1) 0
2) 0 unless they have stock, interest bearing accounts, anything that gives them interest, dividents, ets
3) 0
4) 0
5) 0
6) $39K
7) Whatever they did make in 2012
8) Unless the instructions ask about a car, you need to give the value of all bank balance, cash in the wallets, stock accounts, and, yes, the value of the business your parent owns. </p>

<p>I expect that the school will come back wanting more info on the business, to make sure the value your reported was accurate and would allso want all kinds of other info. But it might be wise to wait and give what they request instead of sending everything and anything there. </p>

<p>Again , it will depend upon the school and how they value your dad’s kind of business. People in the US own Airport Limo, jitney, chauffer taxi services and their kids go to college, and yes, the business has to be valued and your dad’s business willl likely be valued just like that as there is a precedence. But school may vary on how they evaluate that business. But the value of those buses, and what your dad could get if he sold that business would be an asset value that needs to be reported. Also the net income your family gets. The rest, the schools may request and, yes, they may well add back some of those expenses, but not for certain, and which ones, how, is up to the individual school.</p>

<p>Now I stuck in zero assumeing your parents don’t have accounts and things lying around. No retirement accounts, no savings accounts. Whatever they do own, and any money they do get, is supposed to be reported. I am assuming that the $39K is all that your family got or will get this year, and that you don’t own any other assets. like your house that you live in, some land, a rental unit. Unless the house is already covered in another question. Usually a car is specifically mentioned if they want that included in PROFILE. </p>

<p>You don’t know what the business expenses and deductions will present any or much of a problem. It depends upon the school, as I repeatedly say. AT this point I would either fill out the forms simply as I showed you and wait for quesitons, or contact a fin aid officer and ask for a phone consultation and ask the person there to get you to someone who works with international fin aid forms to go over exactly what they want from you. In other words, ask the college fin aid officer what you are asking us as that is the only way to directly address what a school specifically wants, as schools are not consistent on this.</p>

15

<p>I don’t know why 3,4,5 would be zero. I would expect 3 and 4 should be $39k and 4 would be whatever tax was paid on a $39k income. Though for 5 there may be additional amounts from “state and local taxes, levies, and mandatory retirement payments”.</p>

<p>OP, legitimate costs of doing business like employee salaries, bus maintenance, cost of gas should be allowed by schools. In the US business are allowed to subtract depreciation of business assets. That’s an example of something that may not be allowed.</p>

<p>Understand that without knowing how taxes work in your country it is hard for us to respond definitively. Have you looked at last years tax returns that were filed?</p>

16

<p>Sorry, 3 should be $39K. My bad. OP indicates no taxes paid, or filed on the $39K. The business is what filed the taxes. I don’t know what other assets, accounts and things the family has going, but the indication was that the $39K and the business was it. If so, the business would be assessed as an asset, and the expenses and deductions for it scrutinized to see what could be added back in as income by US financial aid officers. I’ve seen some things added back in that made no sense, by the way, so who knows what a school will do.</p>

17

<p>Okay! Thanks you too. Now I’ll try to give more detail into this situation since I just read all your comments and I might even be putting 0 on something that shouldn’t be.</p>

<ol>
<li>My parents do not pay for taxes; they do it on the name of the business, or rather, the business pay taxes.</li>
<li>My dad has a bank account (a savings account) but that’s an ordinary bank account with no investements, etc. I did put the amount of savings my dad has on the asset list.</li>
<li>My parents don’t have any investements or any stocks at all. Like I told you, the only source of income is the business. My parents also don’t have a retirement plan savings, no car insurance, and no health insurance.</li>
<li>The value of the business (which according to my parents is about $290k) is already asked on the business section, so I don’t think I should add that as an asset. They also use only one little office (and they pay rent for that as well) which is the one located here in El Salvador. The only think that could be considered as an asset here are the 3 buses, but again I don’t think that should be added there. The PROFILE says: “add any other asset not listed on this page (jewelry, antiques, art works, etc…)”. I think it has to be related with the such.</li>
<li>My parents don’t own a land and they also don’t own a house. They pay rent for the house we live in. </li>
</ol>

<p>And I can show the income tax form on a private message (the one from 2011) just so you see what my parents fill. I can’t explain very well here, but I know that will present a problem because my parents made a huge mess for me, thanks to the way they fill tax forms. But hey, they are the ones who own the money, not me, so they can do whatever they want with it.</p>

18

<p>The value of the business includes the buses and inventory, i would think. It’s the value of all things of the business if it should all go on the market to be sold. Also does your family own land, real estate, a house, things like that?</p>

19

<p>Oh, okay. So all that will be included on the business section.</p>

<p>No. I already said that my parents don’t own anything like that. The “land” we use is borrowed; we pay rent for it (the house and the office).</p>