# Presentation: 068114

## Independent Regular Worksheets B and C

***EFC***

## Objectives

- Calculate the EFC using Worksheets B and C
- Identify allowances against a student’s and spouse’s income
- Evaluate impact of assets
- Evaluate inclusion of untaxed income from FAFSA worksheets A, B, and C

## Scenario 1

- Independent student without dependents
- TN resident
- Student’s AGI $16,500
- Owns a small business with 112 full-time equivalent employees and a net worth of 27,000
- Student’s age 29
- Required to file 1040
- Household size 1
- Number in college 1

## Formula Determination

**Which formula should be applied using the information provided?**
**Regular**
**Simplified**
**Automatic Zero**

**Live Meeting Poll**

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## Scenario 1 Poll Answer

- Formula to use – Regular
- Why
- Student filed 1040

## Student’s Income

***Student’s Income***

***16,500***

***16,500***

***         ******0***

***16,500***

***16,500***

***16,500***

***16,500***

***         ******0***

## Tax Allowances

***Tax Allowances***

***2,094***

***       ******0***

***  ***

**TN Tax Rate: 0%**

**.0765 X 16,500 = 1,262**

***1,262***

***2,094***

## Allowances Against Student Income

***Allowances Against Student Income***

***  ******6,050***

***         ******0***

***2,094***

***       ******0***

***1,262***

***   ******9,406***

## Contribution from Available Income

***Contribution from Available Income***

***16,500***

***   ******9,406***

***   ******7,094***

***   ******3,547***

## Contribution from Assets

***Contribution from Assets***

***1,300***

***         ******0***

***27,000***

***10,800***

***12,100***

**.40 X 27,000 = 10,800**

## Contribution from Assets

***Contribution from Assets***

*** ******7,900***

***27,000***

*** ******4,200***

***12,100***

## Contribution from Assets

***Contribution from Assets***

***1,300***

***         ******0***

***27,000***

***10,800***

***12,100***

*** ******7,900***

*** ******4,200***

*** ******1,580***

## Expected Family Contribution

***Expected Family Contribution***

***3,547***

***  ******1,580***

***5,127***

*** ******5,127***

*** ******1***

## Scenario 2 - Activity

- Complete the Regular Worksheet C activity located on PW page 4-3

## Scenario 2 – Activity Debrief

- Independent student
- Married with dependent
- VA residents
- Student/spouse AGI $36,200
- Filed 1040
- Student’s age 29
- Household size 3
- Number in college 1

## Total Income

***Total Income***

***36,200***

***8,800***

***27,000***

***35,800***

***36,200***

*** ***

*** ***

*** ******37,440***

***          ******0***

***1,240***

***1,240***

*** ******37,440***

## Allowances Against Income

***Allowances Against Income***

***4,859***

***  ******3,080***

**VA Tax Rate: 4%**
**.04 X 37,440 = 1,498**

**.0765 X 8,800 = 673**

**.0765 X 27,000 = 2,065**

***1,498***

***   ******673***

***19,070***

*** ******31,245***

**.35 X 8,800 = 3,080**

***  ******2,065***

## Available Income

***Available Income***

***37,440***

***31,245***

***6,195***

## Contribution from Assets

***Contribution from Assets***

***1,300***

***       ******0***

*** ***

*** ******10,800***

***12,100***

***  ******1,900***

***     ******133***

***27,000***

**.40 X 27,000 = 10,800**

***10,200***

## Expected Family Contribution

***Expected Family Contribution***

***6,195***

***133***

***   ******6,328***

***1***

***   ******1,392***

***1,392***

## Asset Conversion Rate

**An asset of $10,000 would likely result in a higher EFC for an**
**independent student without dependents other than a spouse**
**independent student with dependents other than a spouse**

**Live Meeting Poll**

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## Asset Conversion Rate Poll Answer

- Independent without dependents since the asset conversion rate is higher at 20% vs. 7%

## Compare Asset Contribution

- Scenario 1

- Scenario 2

***1,300***

***       ******0***

*** ***

*** ******10,800***

***12,100***

***  ******1,900***

***     ******133***

***27,000***

***10,200***

***1,300***

***         ******0***

***27,000***

***10,800***

***12,100***

*** ******7,900***

*** ******4,200***

*** ******1,580***

## Compare Income Protection Allowance

- Scenario 1
- Independent Without Dependents

- Scenario 2
- Independent With Dependents

## Closing

- Questions or comments