<p>I'm helping my sister fill out her FAFSA and wanted clarification regarding reporting family-owned businesses. I am aware that if the business is less than 100 employees and is majority owned, then we will not have to report it at all.</p>
<p>However, how about the actual amount of money you have in the business bank account? Do you report this as part of the question with how much you have in your personal bank accounts? I'm sure you don't but I want to be sure. Also, the amount of money in the business checking account is considered an asset of the business anyway in which you qualify from having to report it if you meet the criteria correct?</p>
<p>Also, any income earned through the business is already included in the AGI on the 1040 right?</p>
<p>Is the business incorporated? Do the business bank accounts have the business EIN (vs. your parent’s individual social security numbers) on them? If they are in the business name with the business EIN on them, then they do not need to be reported on the FAFSA. </p>
<p>Regarding the income, if the business is an S-Corp then the income flows through to the owners’ individual tax forms and would show up on the FAFSA that way. I am not sure about other types of businesses (not S-corps), just the S-corp because that is what I have and am familiar with.</p>
<p>My husband is self-employed and has a “business income/loss” that is reported on taxes every year *(very small, family business). The savings account and checking account that are for his business have his SSN on them, as the business is not incorporated and there is no Employer ID number. Thus, we report those amounts on FAFSA just like we report any funds in our personal/household savings and checking accounts. If we do not have to report the amounts in the business bank accounts on the FAFSA, I would love for someone to confirm that. </p>
<p>I am confirming that you don’t report the amount of the business bank accounts for S-Corps , not sure for Sole Proprietors. Remember to report the value of the business as zero if she owns all of the business with no partners and has 100 or less employees…pity the poor person who has 101. Income from the business is included on the 1040. Some colleges wanted my information about the business…those IDOC forms for business owners are killers. </p>
<p>Twinmom2014 - will you please explain why the value of the business should be reported as zero? I’m filling out financial aid forms, and we have an S-corp. I do not know what to put for the value of the business. We only have one full time employee. Please help! Thanks!</p>
<p>If the business is a sole proprietorship, S-Corp, or partnership, the income will be included on the 1040 individual tax return. The sole prop would end up on a Schedule C, all the others would generate K-1s. A C-Corp is it’s own taxable entity, so you wouldn’t report the income: However, when you draw a salary or dividend payments, those end up on your individual tax return and reported as income. </p>
<p>Value is a separate measurement than income. I think “value” need only be reported if the S-corp, partnership, or sole proprietorship has >100 employees? I doubt you ever report the value of your share of a C-corp, because you’re not an owner - you’re a shareholder. i.e., you don’t report your share of the income of Disney or Costco if you own stock.</p>
<p>If you’re over 100 employees for an S-Corp, you would report your SHARE of the value. i.e., if you’re a 10% owner, you report 10% of the value of the S-Corp if it would be sold today. The easiest way to do this might be get your hands on a Balance Sheet, and report 10% of assets minus liabilities. But I’m not sure if book value of the company is an accurate measurement of value. It may or may not be, depending on the company. </p>