<p>Im filling out my fafsa for the 2013-2014 year but I have a question.
My parents adjusted gross income for 2012 was $89,700 so that would make me ineligible for fafsa. But my father is self employed and his business expenses totaled over $74,000 under his itemized deductions thus leaving an actual income of 15,700. Is there anything I can do to fix this problem?</p>
<p>Not sure what you are asking. You are not ineligible for fafsa. Filling out FAFSA makes you eligible for financial aid where you apply. It also automatically makes you eligible for $5500 in stafford loans for your freshman year. It doesn’t matter how much your parents make to be eligible for this loan - you just have to complete the form to qualify.</p>
<p>Sorry, I meant for the pell grant because the fafsa asks for your adj gross income which isn’t nowhere near what they actually made.</p>
<p>What problem do you need fixed? If AGI is $89,700, and Schedule C income is $15,700, I presume your parents have other income of $74,000?</p>
<p>Or, do you mean Schedule A deductions are $74,000? That is not Business expenses. Business expenses go on Schedule C.</p>
<p>The FASFA requests certain numbers from the 1040, and they give the exact box number to take it from. AGI is a specific box on the 1040. Don’t make up a number (or put in what you think they are asking).</p>
<p>Business income is line 12 on the tax form. This amount should be business income less any deductions - so his AGI should be correct. Any other deductions on schedule A reduce tax liability - but not AGI.</p>
<p>Yes, business income is line 12, and that should be $15,700. AGI is line 37. So how do you get to $89,700 of AGI on line 37 with $15,700 on line 12?</p>
<p>On their tax form though his income from his 1099’s are included at the bottom as “other” income before his expenses such as gas and parts are taken out and that is what is making his AGI so high.</p>
<p>on line 7 his wages from salary total 25,299
on line 12 his business income totals 3,786
yet on line 21 his other income totals 61,027 which is all of his 1099’s that business sent him.
his AGI is 89,845
on line 40 his itemized deductions total 74,645 which is all of his buisness expences.
Im just asking what should I do to receive the pell grant because if I put his AGI in the form I know I wouldn’t be eligible for it.</p>
<p>Put the things on the lines that they go on. Then file it. As soon as your dad has filed his taxes, you will need to link your FAFSA to his tax return at the IRS website. That will cause the numbers that the IRS has to over-write anything that you have put in the wrong place. In other words, if his AGI will make you ineligible for the Pell, well then there isn’t anything you can do about it. Period.</p>
<p>Dang not even an appeal? Its just high because he ends up buying parts for the companies he works for and just bills them back to them when he is done. He really doesn’t make that much.</p>
<p>That is an odd way to report his business income. Most business owners report their income and expenses on schedule C of the tax return and the net income is then reported as business income on the 1040. If he did it that way, the business deductions would be deducted before the AGI is arrived at rather than as itemized deductions which come after the AGI.</p>
<p>The FAFSA is based on the federal income tax return. You can do what you like with the numbers, but once the forms are linked, the FAFSA will be corrected based on the federal return. Once your college/university has the true figures, go visit the financial aid office and see if a professional judgment can be made in your case. But for that, you will need to have your father’s taxes filed correctly, and then make certain that your FAFSA has been properly re-written by the electronic system.</p>
<p>I just saw swimcatsmom’s post. It hadn’t occured to me that maybe your dad isn’t filing his taxes correctly in the first place. He should take a look at this and get the taxes themselves straightened out.</p>
<p>
You would report hobby income that way.
OP,
Did your parents get professional help to file their tax?</p>