<p>When looking at
AGI
Income Earned
and
Parents paments to IRA/Keogh
or Tax deferred savings...</p>
<p>....which is a SEP
???</p>
<p>the tax deferred line or the IRA line?</p>
<p>Is the small business is 1 employee, self employed etc--those assets are not included in cal...
but
the estimator seems to be doing something funky with agi vs income earned, and the SEP contribution so I think I am not accountign for it correctly in the estimator</p>
<p>If you are also a small business owner and have exp...any ideas?
I know there is an error in the FAFSA income earned for work instructions -so I will recheck that...but any guidance would be great
'
Thanks</p>
<p>I should add the reason I think I am making an error in the estimator is because there isn’t somewhere an employer’s contributions to one’s retirement get counted back IN for income…</p>
<p>I’m not entirely sure I understand. Is it the line from the tax return you are asking about? If so it is the contributions shown on line 28+32 on 1040 or line 17 if you do a 1040A</p>
<p>According to the above link, question 95, employers contributions to tax-deferred pension and savings plans should not be reported on the FAFSA as an untaxed benefit. Pretax contributions you make are added back to income in the EFC formula though.</p>
<p>Income from work amounts are used to calculate certain allowances such as for FICA deductions.</p>
<p>I have an S corp and a SEP-IRA. When an S corp contributes to the SEP-IRA, it is considered a business expense and reduces the business’ ordinary business income. The business income (or loss) gets transferred to the personal tax return(s) of the owner(s) on line 17 of the 1040, and is thus added into (or subtracted from) the AGI. </p>
<p>So you can see that the SEP-IRA is not part of the AGI. It’s also not included as a deduction on either line 28 or line 32 of the 1040 because it was accounted for on the business tax return already. </p>
<p>Your question is about whether or not the SEP-IRA contributions get added back in to the AGI for FAFSA purposes. I’ll have to look up last year’s FAFSA to see what I did with it.</p>
<p>Edited to add:
The FAFSA instructions ask that you add back in lines 28 and 32 from your 1040, but as I said above, the S-Corp’s SEP-IRA contributions do not appear there.</p>
<p>Do not add back in S-Corp contributions to pension, profit-sharing etc plans (these appear on the 1120S, line 17). These contributions do not appear on lines 28 or 32 of your individual 1040. There may be occasions when self-employed people would have a Self-employed SEP that would appear on line 28 of the 1040, but this is not one of them.</p>
<p>This makes sense because there’s a parallel situation for employees: you wouldn’t add in employer contributions to a 401k if you were employed by a company rather than self-employed.</p>
<p>It turns out I added the SEP back in on last year’s FAFSA…this year I’ll know better.</p>
<p>Right
this is what I am trying to figure out–</p>
<p>SEP because I think its messing my forms calc…</p>
<p>we also had an IRA contrib for me which we may need to forgo and put it in SEP it thats better…</p>
<p>We saw an accountant today to ask about some things–
–and with our s corp, sep etc
he said the calcs for the EFC was way too high–(almost 100% equal to DHs income apart from any s corp assets) so I know I am putting in the wrong #s…</p>
<p>I do know being under 100 employess and owning 100% assets aren’t counted</p>
<p>If you just report the items from the lines on the tax form, you will be all set. If the instructions ask you for line 7, put in the number on line 7. </p>
<p>Are you using an efc calculator? You might want to use the FAFSA4caster, instead. You can put the numbers in & get an estimated EFC - that way, you can follow the step-by-step instructions.</p>
<p>thanks vball…
with 2 returns, personal and S corp etc…
its very complicated isn’t it! Can’t just plug in #s without knowing if they are in the right place–especially knowing there are errors in the FAFSA calculations that have yet to be corrected</p>