1040-US: 433Wrk Business Income and Expenses Worksheet

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Question

How does the 433Wrk: Business Income and Expenses worksheet calculate?

Answer

The Business Income and Expenses Worksheet displays information from the tax return about a business activity and converts it into the format required for the filing of a Form 433.

The business activity selected on Screen 433-2, Unit displays general information at the top and displays annual totals from the tax return in the Gross Annual column, categorized by Form 433 line items. Income or expense items not applicable to Form 433 line items are displayed as Other income or Other expenses, and a statement prints to show greater detail.

The Source column shows where on the tax return the information in the Gross Annual column was derived from, depending on the business activity selected and, in some cases, the accounting method used in that activity. The Gross Monthly column divides the Gross Annual column by twelve months to convert it to average monthly amounts required by Form 433 calculations of collectability.

If no data is entered for a Form 433 line item on the Screen 433-2 Business Income and Expenses data entry section, then the amount in the Current Profit & Loss field equals that of its Gross Monthly field. However, data entry on Screen 433-2 supersedes tax return data in the Gross Monthly field to generate the Current Profit & Loss column with the most up to date information possible. The Current Profit & Loss column’s Net business income is used in the computation of the Household Income and Expenses Worksheet.

Related topic: 1040-US: Forms 433, 433-A, 433-A (OIC), and 433-F; Form 656; 433Wrk FAQs

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