This booklet is designed to
provide credit personnel with an overview of common issues that arise when
an individual tax return analysis is required after a request for credit.
It covers only the more common forms and schedules that are likely to be
included with an individual tax return and is not intended as a reference
for preparing income tax returns.
There are over ninety federal tax forms and schedules listed by the
Internal Revenue Service (IRS) relating to individual taxpayers; this
guide covers only the sixteen most common.
This booklet is
arranged in a three-part format. Part I presents the basic Income Tax
Model and the standard 1040 tax return form. Part II presents supporting
schedules relating to business or investment income, such as dividends,
interest, and partnership or sole proprietorship. Part III presents
supporting schedules relating to personal deductions or tax credits. Items
listed on these schedules generally represent major expense categories
that may need to be taken into account when gauging a borrower's potential
cash flow.
