My father owns his own small business, do we exclude his income from the FAFSA?

Paying for College
1

<p>I am really confused about what we do and do not exclude from our FAFSA. My father started his own business and it has 3 employees. This is our only source of income. My mom does not work. Can someone please help me understand this?</p>

2

<p>Are your parents married?</p>

<p>If so, then his income goes on your FAFSA.</p>

<p>If your parents are divorced, then (I think) you include what he gives your mom for support.</p>

3

<p>No they’re still married. But I saw something that said to not include the business as an asset. I don’t get what that means.</p>

4

<p>It means the value of the assets of the business are not included on FAFSA. Assets are things like the building, equipment, vehicles etc etc. Your Dad’s income must still be reported. (assets and income are not the same thing).</p>

5

<p>Swimcat…would he include money held in a business account?</p>

6

<p>Yes! I’d like to know that too.</p>

7

<p>Assets belonging to the business would not be included. If it is a business account (of a qualifying business according to FAFSA rules) then it would bot be reported. Of course the business account can only include business assets, not any personal assets.</p>

8

<p>So this would only be his like american express business account and that’s basically it?</p>

9

<p>If that is a bank account for the business. (I tend to to think of american express as a credit card, credit card debt is not reportable on FAFSA.)</p>

<p>Any other bank accounts not related to the business are reportable assets.</p>

10

<p>Ok it is his business account so I will ask him about it. Thank you for your help!</p>

11

<p>Did your dad report an amount on line 12 of his 1040? If so, that is his income. If that amount is negative, it’s reported as 0.</p>

<p>If your dad did not report an amount on line 12 but did report an amount on line 17, you need to know if he also filed a Schedule K. If so, and if there is an amount in Box 14 (Code A), form 1065, this is the amount reported as income from work. Otherwise, it’s 0.</p>

<p>If there is any amount on line7, this is added to any of the above and reported as income from work.</p>

<p>Remember that taxes paid is line 55 ONLY.</p>