From what I remember, 401K deductions for the year are counted (ie “add back”)… but the 401K balance is excluded from asset list. I was going to try to google to verify, but not sure the links would be permitted here.
This is correct. The add back in the qualified retirement-account deductions from that’s year’s tax return.
This week somebody here in town (I do talk to real people sometimes too 
) said this:
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with Divorced parents only CSS profile includes non-custodial parent income .... ie FAFSA schools only consider custodial income.
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For divorced parents who filed FAFSA … any caveats here?
If parents are divorced and no longer living together, only the custodial parent (and spouse if remarried) financials go on the FAFSA. Any child or spousal support is included. The non- custodial parent (and spouse if remarried)income and assets are not on the fafsa when parents are divorced.
For the profile, the custodial parent (and spouse if remarried) completes the Profile with their financials. The non-custodial parent (and spouse if remarried) completes the non custodial form…if the school requires the non-custodial parent form.
Some colleges request non-custodial parent info via their own school form.
Adding…with the exception of University of Chicago, schools requiring only the fafsa do not guarantee to meet full need for all accepted students.
Some additional notes on divorced parent situations:
Some colleges using CSS Profile require the CSS Non-custodial Profile, but others do not.
Chicago requires its own additional forms (CSS Profile may be used instead) as well as FAFSA, but does not require non-custodial parent finances.
Some colleges have other permutations of rules. For example, Princeton uses its own additional forms, and requires non-custodial parent finances if the custodial parent has not (re)married.
Yes, it is complicated, and each college needs to be checked separately.