The Self Employed Income Analysis Form is a valuable tool for evaluating your self-employed income. This form can help you calculate your yearly income, track your expenses and deductibles, and more. By using this form, you can ensure that you are taking full advantage of all the tax deductions available to you. With this information in hand, you can make sure that your tax return is accurate and that you are getting the most out of your self-employment income.
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Question | Answer |
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Form Name | Self Employed Income Analysis |
Form Length | 6 pages |
Fillable? | No |
Fillable fields | 0 |
Avg. time to fill out | 1 min 30 sec |
Other names | self employment income worksheet, self employed income worksheet, self employed income calculation worksheet, proving income when self employed |
FNMA
FNMA considers any individual that has a 25% or more ownership interest in a business to be
BUSINESS STRUCTURES
Knowledge of the structure of the business that a
Sole Proprietorships: In a sole proprietorship, the individual owner has unlimited personal liability for all debts of the business. Since no distinction is made between the owner’s personal assets and the assets used in the business, creditors may take either (or both) to satisfy business obligations. The success of this type of organization depends solely on the individual who owns it. His or her death would terminate the business and place the assets into probate, delaying the disposition of the assets to creditors and heirs. Business income or loss is folded into the individual owner’s tax return.
Partnerships: A partnership is formed when two or more individuals form a business and share profits, losses, and responsibility for running the business. In a general partnership, each partner is personally liable for the debts of the entire business and is responsible for the actions of every other partner. A general partnership is dissolved immediately on the death, withdrawal, insanity, or insolvency of any of the
Corporations: A corporation is a
“S” Corporations: An “S” corporation is generally a small,
EVALUATING INDIVIDUAL TAX RETURNS (IRS FORM 1040)
Schedule C (Profit or Loss from business): The Sole Proprietorship income (or loss) calculated on Schedule C is business income or loss. Depletion and depreciation can be added back, while the 20% (or 50%, depending on year of return) Meal and Entertainment exclusion must be deducted.
Schedule D (Capital Gains and Losses): A capital gain or loss is generally a
Rents (from Schedule E): Depreciation related to income (or loss) from rentals must be added back to net gain (or loss).
Farm Income or Loss (from Schedule F): This is the profit or loss from farming. Any depreciation shown on Schedule F must be added back to the adjusted gross income. (In general, FMC mortgage does not make loans to farmers unless the subject property is not the
Social Security Income: This income may be included if it will continue to be received for at least three years. The
Adjustments to Income: Most of the income adjustments shown in IRS From 1040 must be added back to adjusted gross income. These adjustments include IRA deductions, the
Employee Business Expenses: These are actual
Depreciation and Amortization (Form 4562): Amortization can be added back to adjusted gross income, but depreciation should
EVALUATING CORPORATE TAX RETURNS:
The
If the corporation operates on a fiscal year that is different from the calendar year, the lender must make time adjustments to relate the corporate income to the individual tax return (which is on a calendar year basis.)
Lenders should pay particular attention to the following items when evaluating income from U.S. corporation income tax returns (IRS form 1120) to make sure they develop the correct “adjusted” business income. *Taxable Income: This is the corporation’s net profit. IT must be reduced by the corporation’s total taxes to determine
*Depreciation: This
*Depletion: This
*Mortgage, notes, bonds payable in less than one year: This figure, which is found on the corporation’s balance sheet, must be deducted from the corporation’s
Once the adjusted business income has been developed, it should be multiplied by the borrower’s percentage of ownership in the business. The lender should then subtract any dividend income from the business that the borrower reported on his or her individual tax return to arrive at the total income available to the borrower for qualifying purposes. After the income available to the borrower for qualifying purposes has been determined, the lender should
EVALUATING “S” CORPORATION TAX RETURNS:
The
Once the income available to the borrower for qualifying purposes has been determined, the lender should re- evaluate the “S” corporation’s overall financial position, using the Comparative Income Analysis (Form 1088) or other alternative documentation that FNMA considers acceptable. A borrower’s withdrawal of cash may have a severe negative impact on the business and may lead to a negative cash flow. When this occurs, it may not be possible to confirm the stable,
EVALUATING PARTNERSHIP TAX RETURNS
The
Once the income available to the borrower for qualifying purposes has been determined, the lender should re- evaluate the partnership’s overall financial position, using the Comparative Income Analysis (Form 1088) or other alternative documentation that FNMA considers acceptable. A borrower’s withdrawal of cash may have a severe negative impact on the business and may lead to a negative cash flow. When this occurs, it may not be possible to confirm the stable,
EVALUATING PROFIT AND LOSS STATEMENTS:
USE FOR BUSINESS INCOME ONLY
Fannie Mae |
Form 1084A |
Borrower Name |
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Property Address |
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General Instructions: This form is to be used as a guide in Underwriting the
The Schedule Analysis Method derives only
Schedule Analysis Method
A. Individual Tax Return (Form 1040) |
19____ or 20____ |
20_____ |
20_____ |
1. Schedule C: |
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a. Net Profit or Loss…………………………………. |
_________________ |
_________________ |
__________________ |
b. Depletion…………………………………………... |
_________________ |
_________________ |
__________________ |
c. Depreciation……………………………………….. |
_________________ |
_________________ |
__________________ |
d. Less: 20% Exclusion for Meals and Entertainment... |
_________________ |
_________________ |
__________________ |
2. Schedule D |
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Recurring Capital Gains……………………………… |
_________________ |
_________________ |
__________________ |
3. Schedule F |
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a. Net Profit or Loss………………………………….. |
_________________ |
_________________ |
__________________ |
b. Depreciation……………………………………….. |
_________________ |
_________________ |
__________________ |
4. Schedule |
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a. Form 1065, Partnership Ordinary Income (Loss) |
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+ Guaranteed Payments…………………………….. |
_________________ |
_________________ |
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b. Form |
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Income (Loss)………………………………………. |
_________________ |
_________________ |
__________________ |
5. Schedule 2106 |
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Total Expenses……………………………………….. |
_________________ |
__________________ |
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6. |
(+)_______________ |
_________________ |
__________________ |
7. Total………………………………………………….. |
_________________ |
_________________ |
__________________ |
Complete sections B, C, and D only if the borrower needs more income to qualify for the loan than is shown in section A and the borrower has the legal right to draw additional income from the business to qualify for the loan.
B.Corporate Tax Return Form (1120) – Corporate Income to qualify the borrower will be considered only if the borrower can provide
evidence of access to the funds. |
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19____ or 20____ |
20_____ |
20_____ |
1. Taxable Income (Tax and Payments Section)………... |
(+)_______________ |
_________________ |
__________________ |
2. Total Tax (Tax and Payments Section)………………. |
_________________ |
__________________ |
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3. Depreciation (Deductions Section)…………………... |
(+)_______________ |
_________________ |
__________________ |
4. Depletion (Deductions Section)……………………… |
(+)_______________ |
_________________ |
__________________ |
5. Mortgages, notes, bonds payable in less than one year |
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(Balance Sheets Section)……………………………… |
_________________ |
__________________ |
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6. Subtotal……………………………………………….. |
_________________ |
_________________ |
__________________ |
7. Times individual percentage of ownership…………... |
X_______________% |
X_______________% |
X________________% |
8. Subtotal……………………………………………….. |
_________________ |
_________________ |
__________________ |
9. Dividend Income reflected on borrower’s individual |
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income tax returns……………………………………. |
_________________ |
__________________ |
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10. Total Income available to borrower………………… |
_________________ |
_________________ |
__________________ |
C.S Corporation Tax Returns (Form 1120S) or Partnership Tax Returns (From 1065) – Partnership of S Corporation income to qualify the borrower will be considered only in the borrower can provide evidence of access to the funds.
1. Depreciation (Deductions Section)…………………... |
(+)_______________ |
_________________ |
__________________ |
2. Depletion (Deductions Section)……………………… |
(+)_______________ |
_________________ |
__________________ |
3. Mortgages, notes, bonds payable in less than one year |
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(Balance Sheets Section)……………………………... |
_________________ |
__________________ |
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4. Subtotal……………………………………………….. |
_________________ |
_________________ |
__________________ |
5. Times individual percentage of ownership…………... |
X_______________% |
X_______________% |
X________________% |
6. Total Income available to borrower…..……………… |
_________________ |
_________________ |
__________________ |
Total Income Available (add A, B, and C)…………... |
I ________________ |
II________________ |
III________________ |
D.
1. Salary/Draws to Individual…………………………… |
$_________________ |
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2. Total Allowable add back |
$______________ |
X __________% of individual ownership = |
$_________________ |
3. Total net profit |
$______________ |
X __________% of individual ownership = |
$_________________ |
4. Total………………………………………………….. |
$_________________ |
Combined Total I, II, III, YTD = $_______________ divided by _____________ months = $______________________ Monthly Average
This form is only a reference to help organize information from the tax returns. You must refer to the FNMA selling guide for complete underwriting requirements on the
USE FOR BUSINESS AND
(Rental Income, Dividends, and Interest)
Fannie Mae |
Form 1084B |
Borrower Name |
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Property Address |
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General Instructions: This form is to be used as a guide in Underwriting the
The AGI Method begins with adjusted gross income from the individual tax returns and either increases or decreases that figure after analyzing specific lines and schedules of the return. This method derives total income (both business and
If the borrower has passive activity unallowed losses or loss carryovers, use the Schedule Analysis Method of analyzing income.
Adjusted Gross Income (AGI) Method
A. Individual Tax Return (Form 1040) |
19____ or 20____ |
20_____ |
20_____ |
1. Adjusted Gross Income |
_________________ |
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__________________ |
INCOME SECTION: |
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2. Wages, salary considered elsewhere…………………. |
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3. Taxable Interest Income……………………………… |
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4. |
(+)________________ |
_________________ |
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5. Dividend Income……………………………………... |
_________________ |
__________________ |
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6. Taxable Refunds……………………………………… |
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7. Alimony………………………………………………. |
_________________ |
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8. Business Income or Loss- Schedule C |
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a. Depletion………………………………………….. |
(+)________________ |
_________________ |
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b. Depreciation………………………………………. |
(+)________________ |
_________________ |
__________________ |
c. 20% Meals and Entertainment Exclusion…………. |
_________________ |
__________________ |
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9. |
__________________ |
_________________ |
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10. IRA Distributions |
(+)________________ |
_________________ |
__________________ |
11. Pensions and Annuities |
(+)________________ |
_________________ |
__________________ |
12. Schedule E – Depreciation………………………….. |
(+)________________ |
_________________ |
__________________ |
13. Schedule F – Depreciation………………………….. |
(+)________________ |
_________________ |
__________________ |
14. Unemployment Compensation……………………… |
_________________ |
__________________ |
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15. Social Security Benefits |
(+)________________ |
_________________ |
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16. Other |
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_____________________________________________ |
___________________ |
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___________________ |
_____________________________________________ |
___________________ |
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ADJUSTMENT SECTION: |
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17. IRA Deduction……………………………………… |
(+)________________ |
_________________ |
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18. |
(+)________________ |
_________________ |
__________________ |
19. |
(+)________________ |
_________________ |
__________________ |
20. Keogh Retirement Plan……………………………... |
(+)________________ |
_________________ |
__________________ |
21. Penalty for Early |
(+)________________ |
_________________ |
__________________ |
Withdrawal………………………... |
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22. Alimony Paid……………………………………….. |
(+)________________ |
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ADDITIONAL SCHEDULES: |
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23. Form 2106 Unreimbursed expenses |
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(not fully deductible)………………………………... |
________________ |
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24. Form 4562 Amortization……………………………. |
(+)________________ |
_________________ |
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25. Total………………………………………………… |
__________________ |
_________________ |
__________________ |
Go on to next page and complete sections B, C, and D only if the borrower needs more income to qualify for the loan than is shown in section A and the borrower has the legal right to draw additional income from the business to qualify for the loan.
B.Corporate Tax Return Form (1120) – Corporate Income to qualify the borrower will be considered only if the borrower can provide evidence of access to the funds.
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19____ or 20____ |
20_____ |
20_____ |
1. Taxable Income (Tax and Payments Section)………... |
(+)_______________ |
_________________ |
__________________ |
2. Total Tax (Tax and Payments Section)………………. |
_________________ |
__________________ |
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3. Depreciation (Deductions Section)…………………... |
(+)_______________ |
_________________ |
__________________ |
4. Depletion (Deductions Section)……………………… |
(+)_______________ |
_________________ |
__________________ |
5. Mortgages, notes, bonds payable in less than one year |
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(Balance Sheets Section)……………………………… |
_________________ |
__________________ |
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6. Subtotal……………………………………………….. |
_________________ |
_________________ |
__________________ |
7. Times individual percentage of ownership…………... |
X_______________% |
X_______________% |
X________________% |
8. Subtotal……………………………………………….. |
_________________ |
_________________ |
__________________ |
9. Dividend Income reflected on borrower’s individual |
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income tax returns……………………………………. |
_________________ |
__________________ |
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10. Total Income available to borrower………………… |
_________________ |
_________________ |
__________________ |
C.S Corporation Tax Returns (Form 1120S) or Partnership Tax Returns (From 1065) – Partnership of S Corporation income to qualify the borrower will be considered only in the borrower can provide evidence of access to the funds.
1. Depreciation (Deductions Section)…………………... |
(+)_______________ |
_________________ |
__________________ |
2. Depletion (Deductions Section)……………………… |
(+)_______________ |
_________________ |
__________________ |
3. Mortgages, notes, bonds payable in less than one year |
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(Balance Sheets Section)……………………………... |
_________________ |
__________________ |
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4. Subtotal……………………………………………….. |
_________________ |
_________________ |
__________________ |
5. Times individual percentage of ownership…………... |
X_______________% |
X_______________% |
X________________% |
6. Total Income available to borrower…..……………… |
_________________ |
_________________ |
__________________ |
Total Income Available (add A, B, and C)…………... |
I ________________ |
II________________ |
III________________ |
D.
financial statements are provided. |
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1. Salary/Draws to Individual…………………………… |
$_________________ |
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2. Total Allowable add back |
$______________ |
X __________% of individual ownership = |
$_________________ |
3. Total net profit |
$______________ |
X __________% of individual ownership = |
$_________________ |
4. Total………………………………………………….. |
$_________________ |
Combined Total I, II, III, YTD = $_______________ divided by _____________ months = $______________________ Monthly Average
This form is only a reference to help organize information from the tax returns. You must refer to the FNMA selling guide for complete underwriting requirements on the