Over the years, many families accumulate assets, such as a house, cash savings, and stocks. Your assets include the present value of everything in your bank account and stock portfolio.

If you own a business or farm (though not a family farm that you live on), your assets include the net worth of those holdings.

The good news is that the federal financial aid formula does not consider the value of your home or any retirement accounts as assets that can be used to pay for college. Nor does the formula include non-liquid assets, such as the value of your car or furniture.

Assets typically considered

• Savings
• Checking account
• Stocks
• Bonds
• Mutual funds

Don’t miss out on a simple asset shelter by filing the wrong tax form. If your adjusted gross income (AGI) is less than $50,000 and you file a 1040EZ or 1040A, your assets are excluded from the financial aid calculation.

If your AGI is less than $50,000 and you file another tax form — such as the regular 1040 — you may jeopardize this shelter. Consult your tax advisor for more information.

The financial aid formula also shields a portion of your assets based on your age or that of your spouse, whoever is older.

Calculating available income

Learn how your assets and income all work together to figure out exactly what actual income is available for you to pay for college.