Income from Wages & Self-Employment

<p>I am self-employed. Was my income supposed to show up only in the AGI? And was I supposed to leave off the "Income from Wages" section since it is obviously not wage income? I wish the instructions were explicit on this.</p>

<p>Sure looks like that.</p>

<p>The FAFSA asks for AGI and income from wages, but not for Business Income which is how Self-Employment is reported on the 1040.</p>

<p>And now you've got me thinking, because more than half of Happykid's income in 2011 was from Self-Employment (paid as an independent contractor with a 1099). All I've done so far is the "will file" version of the FAFSA, so I didn't look at this very hard. Oh, ick.</p>

<p>You have to report the Schedule C income as AGI. What they mean is if you have a business or corporation that has it's OWN income - like if you own a corporation - separate of being your salary or self employment income - you don't have to report the income of the business per se. If it's Schedule C it goes into adjusted gross income.</p>

<p>The FAFSA instructions are very explicit on how to derive the income from work figures:</p>

<p>
[quote]
If your parents filed (or will file) a 2011 tax return, each should include only his or her share from IRS Form 1040—lines 7 + 12 + 18 + Box 14 of IRS Schedule K-1 (Form 1065); 1040A—line 7; 1040EZ—line 1. Even if your parents filed a joint return, they should report their earnings separately in Questions 86 and 87.

[/quote]
</p>

<p>Line 12 on the 1040 is business income/loss. Hope that helps!</p>

<p>Whew! Thanks!</p>

<p>If business income reported on the 1040 is negative, it is reported as 0. Otherwise, the amount on the return reported on line 12 is income from work (not the income reported on schedule C ... instead, the amount left after the deductions, which is what is reported on line12).</p>