How to Zero Your EFC: Become Self-Employed
Website design By BotEap.comYou can reduce your EFC to zero and automatically maximize your federal and college financial aid if you’re self-employed and in control of your own W-2. Certainly, this is not what most financial aid advisors will advise you to do, but it is the way college financial aid works. It is the great secret of the federal government that they prefer people not to know.
Website design By BotEap.comThe FAFSA student aid form, the CSS profile, and a college’s stand-alone financial aid form depend on the W-2 income of the parents and students. Assuming you’re not unemployed, there’s a huge benefit to becoming self-employed. You can form a corporation, such as an S-Corp, and control the income on your own W-2.
Website design By BotEap.comI would advise you to get a competent CPA who is well versed in the college financial aid process. The CPA should be able to guide you regarding the best type of corporation to form. There are General Corporations, S-Corps, LLC or Limited Liability Companies and Partnerships. Each has its own advantages and disadvantages.
Website design By BotEap.comColleges typically require copies of all submitted tax documents, so make sure they are filled out correctly. And make sure that when you send your tax documents to the school, they are the ones you filed with the federal government. There are those who modify tax documents to receive financial aid. That would be committing tax fraud and it’s not something you want to do.
Website design By BotEap.comWhat kind of business can you create?
- If you’re an accountant, start your own CPA firm.
- If you’re a plumber or electrician, get all the licenses and certifications you need and be self-employed;
- If you’re a carpenter, become a licensed contractor;
- Make sure your child works off the books or does volunteer work during the year before you apply for help: Earnings from the previous year are the earnings being analyzed;
- Also, don’t let grandparents of students load their child’s account with money. Once your child starts college, ask grandparents to provide cash funds.