<p>I am not sure about how my self employment will affect my daughter's application for aid with FAFSA and CSS Profile.</p>
<p>I get paid a good deal of money from my employer 1099, but most of the money is used to pay back loans (used to purchase the business) and other expenses leaving me with about 50,000 in profit. </p>
<p>How does the FAFSA and CSS Profile look at that? </p>
<p>Currently I am not listed as a LLC or Inc, but looking to change. However, before I do this also wanted to see how that would affect her applications. </p>
<p>Lastly, my wife and I are divorced, but live in the same school district. She is paid more then my profit from the business, but all is W2. Would it be better if my daughter were to move in with her for the senior year to have my ex-wife considered the custodial parent? </p>
<p>This thread would be better off in the financial aid forum. Fafsa will use AGI. Your daughter only has to live with one parent or the other one more day in the 12 months prior to filing the fafsa for that parent to be the fafsa custodial parent. CSS, like fafsa, is only a form that asks for information, a lot of information. Unlike fafsa, schools can use the CSS information in any way they like. With self employment there may be expenses and deductions that some schools will add back to your AGI and say you have that amount available to help pay college expenses. Most schools that use CSS or their own form will also ask for non-custodial parent financial information.</p>
<p>I’m self-employed and have an LLC. With the CSS Profile, my child’s college adjusted deductions and other numbers the business reported when filing taxes, which boosted the LLC’s profit and my net income.</p>
<p>For Profile it may not matter if your D moves with your wife. Many schools also look at the non-custodial parent income, too. Being self employed will definitely adversely affect your expected contribution under Profile. Your expenses will be added back in.</p>
<p>If you are looking at CSS Profile schools, it is really unpredictable. All will consider the income of both parents, and most will ask to see your Schedule C or other business tax records. The can and will add back some business deductions to increase your income for purposes of financial aid,but each college has its own polices and practices. Deductions for depreciation and vehicle expenses seem to be particularly disfavored – it’s worthwhile when it comes to working with the college to submit a letter of explanation for any particularly high costs. In your case it would be important to document that the loan payments are directly related to the purchase of the business. I have heard (second-hand, anecdotal) of a college that simply refused to reduce the business gross by more than a particular percentage, which created a hardship for an applicant with a high overhead business.</p>
<p>I’m self employed, and my ex is self-employed – and I really think that you need to be prepared for widely divergent views of your family’s need. </p>