<p>If I am reading the FAFSA instructions question 80 asks for the amount parents paid in income tax (lilne 57 on 1040). I do not see a place to account for self-employment taxes paid? How is this reflected in the FAFSA calculation?
Thanks in advance</p>
<p>Aren't self employment taxes deducted before the AGI is arrived at? As the taxable income you report is the AGI the self employment taxes have already been accounted for.</p>
<p>Self-employment tax is not reported separately on the FAFSA. It is safe to assume that if the value reported on a particular line on your tax form is not asked for in the FAFSA instructions, then you don't have to put that info on your FAFSA.</p>
<p>On the 1040, Line 61 reflects "total tax"--this figure includes self employment tax, however, when FAFSA asks for taxes paid they refer to line 57 on the 1040 which does not include self-employment taxes</p>
<p>On the 1040, you can only deduct 1/2 your self employment taxes to arrive at the AGI figure</p>
<p>That's right, you only deduct 1/2 of self-employment tax to arrive at your AGI. </p>
<p>When you work for a company, the company contributes half, and the employee contributes the other half which is deducted from their paycheck.</p>
<p>As a self employed person you need to pay the entire amount, so the IRS allows you to deduct the half that a company would typically contribute. Since you are not working for a company that automatically deducts the employee part, as a self-employed person you need to pay that at the end of the year. SO, in other words the other half is what everyone else had already paid through deductions on their paycheck. ANd no one reports that on their FASFA</p>
<p>The FICA you paid has an above the line deduction for 1/2 of the amount paid on page 1 of the tax return, so the AGI you enter has been adjusted for that.</p>
<p>The EFC formula calculates the other half in the formula, so it is addressed, just not in a specific line entry you make</p>