My Parents don't have W2s?

Paying for College
1

<p>My parents own their own business, so they don’t have W2s. Various colleges and IDOC are asking for them, what should I do?</p>

2

<p>Certainly many students have parents who are self-employed. Call a school’s FA office and ask how this issue is handled.</p>

3

<p>Don’t your parents pay themselves a salary from the business? If so, that would be done with a W2. How do they pay themselves?</p>

4

<p>If they don’t have w-2’s from their business…they should have 1099’s.</p>

5

<p>If they are entirely self-employed, they won’t have a W2 or a 1099. However, they will be filing a Schedule C “Net Profit from Business” when they complete their income taxes.</p>

<p>You need to find out if the correct information for the FAFSA is the Gross Receipts from their businesses, the Net Profit (after expenses) as reported on Schedule C, or if it is a figure that includes an adjustment for the Social Security and Medicare taxes calculated on Schedule SE “Self Employment Tax”.</p>

<p>Good luck!</p>

6

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<p>Could very well be. I have one form 1099 from my self-employment each year, but my wife has none. It depends on the number of clients and the nature of the clients. </p>

<p>What my son has done so far when the question has come up is simply state that neither of his parents have W2 forms and indicate that the forms we have already filed (for IDOCs verification or FAFSA verification) tell the whole story about our family income. Believing that or not is up to the college, but there isn’t anything wildly unusual about our situation. </p>

<p>Good luck in the financial aid applications.</p>