How do I value a hobby Etsy shop on the FAFSA?

Paying for College FAFSA & CSS Profile
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I have what the IRS considers a small business through Etsy. I sell vinyl stickers for the back of car windows. Just a little supplemental income that helps pay for essentials (especially this senior year)!

I’m concerned that with the new changes to FAFSA that I will have to supply a dollar figure for what my business is “worth”. It’s just me, no workers, and even with the bottom line from my Schedule C added in, my AGI is $38,955.00 for a family of 3. How do I value my business? I don’t even know where to begin. No business debt, my machine was paid off years ago. My inventory is pretty low. I just don’t have a clue how to answer these questions that I am told will be asked on the new FAFSA.

Is it possible that I will qualify for the simplified plan on FAFSA and not have to report assets?

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I don’t think there have been changes to the small business exclusion, but double check as I haven’t been paying attention to the recent changes.

https://finaid.org/fafsa/smallbusiness/

EDIT: see correction by @Mwfan1921 below

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There is no longer an exemption for small businesses on the new FAFSA.

When new FAFSA is available in December (or Jan), OP may have to value the business. They may not have to value the business if they meet any of the exclusions for asset reporting on the new FAFSA. If OP does have to value the business, I would recommend simply using assets minus liabilities.

Details about potential exclusion of asset reporting here:

Other applicants will have assets excluded from their SAI calculation based on income, tax filing status, and receipt of a benefit from a federal means-tested benefit program. This asset exclusion effectively replaces the SNT from the EFC formulas. The following applicants are eligible for the asset exclusion provision:

  • An applicant who qualifies for an automatic Maximum Pell Grant award (as described below under “Calculation of a Federal Pell Grant”)

  • An applicant who received a benefit under a federal means-tested benefit program in the prior two completed calendar years (i.e., 2022 or 2023 for the 2024-25 award year) or whose parent or spouse received such a benefit during the same period

  • A dependent applicant whose parents (1) have a total AGI of less than $60,000; (2) do not file a Schedule A, B, D, E, F, or H (or equivalent successor schedules) on their federal tax return; and (3) either do not file a Schedule C or file that form with a net business gain or loss of $10,000 or less

  • An independent applicant who (1) has a total AGI (including the student’s spouse, if any) of less than $60,000; (2) does not file a Schedule A, B, D, E, F, or H (or equivalent successor schedules) on the federal tax return; and (3) either does not file a Schedule C or files that form with net business gain or loss of $10,000 or less

Dependent applicants will not qualify for an exemption from asset reporting if their parents do not reside in and do not file taxes in the U.S. or a U.S. territory unless they are not required to file due to having income below the filing threshold.

https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2023-08-04/fafsa-simplification-act-changes-implementation-2024-25

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Thanks for the correction—interesting info. I’ll make a note in my prior post.

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Thank you so much. I do believe that we should qualify for the exclusion of assets under the rules as stated in your post above. I appreciate your information.

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