SELF EMPLOYED BORROWER USING IRS FORM 1120
This document will review how to navigate the IncomeXpert tool including the following topics
Step by step instructions
Add an 1120 Income to your borrower on the Borrower page.
On the income tab choose the borrower the income is being evaluated for
Click the magnifying glass next to the 1120 income calculator
Enter the most recent tax year being evaluated
The left column is always the most recent year and the right column is the previous year
Enter the income from the borrower W-2 form if applicable
Enter the cash flow adjustments found on the business IRS 1120 forms if applicable
NOTE: IncomeXpert contains “pop up” messages for income fields with additional requirements to ensure the most accurate income calculation is determined. For example if you enter a number into line 17D (mortgage notes bonds due in less than 1 year) IncomeXpert will remind you that this does not need to be deducted from the income if the business has enough cash or the CPA confirms the debt can “roll over”.
Click the save/calculate button on the left side of the screen to complete income analysis.
Pay note of the trending arrows
- Green up arrow: the income is stable or increasing
- Red down arrow: the income has declined from the previous year
- The top number (63.5%) is the actual change of income from the previous tax year to the current tax year, the bottom number (10% threshold) is your company setting to "trigger" declining income
Use the income analysis section to choose the correct qualified income analysis
- YTD P/L
- 1 Year Average
- 2 Year Average
- User override ignores all calculations and will report the income submitted as the qualified income
- Not Used
Notes in regard to the borrowers income can be entered in for review by the underwriter, auditor, or investor