Filling out the FAFSA for the self-employed
I’m not a genius or a Rhodes Scholar. But I graduated almost top in my class in high school, did well in college and have been successful in my freelance writing career. But the minute I started filling out the FAFSA (Free Application for Federal Student Aid), I felt so inadequate. I’m not an accountant, but I thought I could figure out what they wanted.
Our complicated situation – two self-employed people including one farmer–didn’t really fit well into their questionnaire confines. I called the toll-free FAFSA number about five times to get some verification and answers. I also tested them, and found out that their counselors don’t all come up with the same answer to the same question.
After our Form 1040 tax form is completed, it includes schedules for everything from self-employment tax to rental and pass-through (whatever that is), to business income to farm income. Our brilliant tax accountant prepares another 30 or 40 pages giving more information about health savings account, earned income credit, personal exemptions and more.
On the FAFSA form, they don’t mention much about capital gains or losses. They don’t explain in detail for people like us what exactly an asset can be worth. In the fluctuating commodities market, my husband’s corn and hogs can be worth thousands and thousands of dollars one day, and basically change dramatically the next. You can subtract the debt from the assets. Hallelujah, or we literally would get nothing in financial aid.
We don’t own any land. My husband just operates the farm that his parents’ own. He manages the hog operation and the planting of the fields. The FAFSA form doesn’t really take much of that in to account. By going online and finding other websites that answered more of these difficult questions on debt and farming, I found some answers. I’m just pretty sure we won’t be one of the lucky ones that do not have to verify all their information.
Big debt is a common characteristic in farming. However, most people think that farmers are making loads of money these days because the commodity prices are so high. But in reality, all the products that farmers use to raise their crops and livestock have gone up considerably, too. It’s a vicious cycle.
We muddled through the application and have high hopes for some great news. We pretty much land in the world of poverty when you look at our adjusted gross income. We don’t live a very fancy lifestyle. With our choices of both being self-employed, we don’t make mega-wages, yet. However, if we can get enough financial aid this first year, hopefully we can raise our income much higher next year to help Scott out. At least I’ll be prepared next winter to know what I’m getting into when I go online to FAFSA.
- Demystifying the FAFSA
- Exit Counseling
- Filling It Out
- How the FAFSA Challenged Us to Find Alternative Funding
- Independent or Dependent Student Status?
- Reality Check
- Revising: A Primer for Parents
- The Calculations Behind the Application
- To-Do Lists, Anxiety, and Preparing for College
- What Happens Next?
- Why Submit the FAFSA