I apologize for not following up when I asked this same question about a year ago. I thought I’d get notified when there were responses to my post, but I didn’t and kept forgetting about it. I ended up using the data retrieval tool last year, so I didn’t need worry about it. The year, though, I’ve heard there are issues with people getting “whacked” EFCs back when they do use the DRT, and have to call the colleges who received their reports to make corrections for them. I’m entering manually this time, hoping to avoid this.
My question remains: Is there information from the S corp form 1120S that needs to be included in the calculation for parents “income from work” as asked on questions 86 and 87 on the 2020-2021 application? If we’re joint filers, self-employed LLC filing S Corp, and so don’t use the form1065 K-1; will we just report what shows as income from W2s? The pass-through business income shows up on the 1040 and is included in the totals used to calculate AGI, but is not explicitly asked for in the formula used to report parent’s income on the FAFSA. We do generate a W2 for each of the two of us showing a wage from the business, but adding those together does not come close to equaling the AGI from our 1040 line 7. Are the parent 1/parent 2 income boxes supposed to add up to the AGI? Not sure how literally to answer when it asks for K1/1065 amount to be added to wages, but we don’t file 1065, we use 1120S.
My understanding is that you just report what’s on the W2s unless you reported any business income on schedule 1, lines 12 or 18. That’s unlikely, as S Corp earnings are typically reported on line 17. I suppose you could also have a farm or sole proprietorship separate from the SCorp that might report on lines 12 or 18, in which case you’d include those. The 1065 K-1 is totally different from the 1120s K-1 and I don’t think you report anything from the latter on the FAFSA.
I think what they’re doing is identifying income subject to social security or self employment taxes, which your S Corp business income isn’t. (This assumes when you say “self-employed” you mean you are owner-employees of an Llc filing as an S Corp, which is what it sounds like).
I’m not a CPA but that’s my understanding from talking to one.
Exactly. We are LLC filing S Corp. The fact that the AGI differs from the total of the two W2 amounts is probably what’s got me really questioning what to do.
Yes, but that’s true for folks with large capital gains or interest also. Like S Corp income, that’s all reflected in the AGI, like you mentioned. They’re asking about just one component of the AGI in those two questions. Definitely confusing instructions though!
I don’t know the answer to your question, but I had no problem with the IRS data retrieval on the FAFSA.
We didn’t have a rollover or other retirement withdrawal, just W2 income.
If you don’t use the DRT then be prepared to order a tax transcript.
I have the same question. So did you just report salary from W2s
You are better off starting a new topic than reviving a very old thread. Closing.