With the new 2018 Tax Cuts and Jobs Act, determining cash flow from personal income tax returns is as challenging as ever. Tax returns show taxable income. But borrowers don’t repay debt with taxable income; they use cash flow. The trick is learning how to obtain a reliable monthly or annual cash flow from a personal tax return. Incorrectly estimating cash flow from a tax return can result in bad loan decisions – or missed opportunities. Once you’ve properly converted taxable income into cash flow, that information can be used in your credit scoring model, debt-to-income ratio, or disposable income calculation.
Designed for consumer and commercial lenders, this two-part series will teach you an easy, reliable method to convert a borrower’s personal tax return (Form 1040) into a cash flow statement using the free software included with this course. Part 1 will cover the front page of Form 1040, Schedule A (Itemized Deductions), Schedule B (Interest and Dividend Incomes) and Schedule C (Sole Proprietorship Incomes). (Note: This method does not follow Fannie, Freddie, or QM rules used in mortgage lending.)
- Recurring versus nonrecurring income
- Schedule A: Employee business expenses that may need to be deducted from cash flow
- Schedule B: Determining cash flow from interest and dividends
- Schedule B: Correcting unreliable pass-through interest and dividend incomes earned from partnerships and S corporations (Schedule E partnership and S corporation income will be addressed in Part 2)
- Schedule C: Hidden incomes and a hidden expense in a sole proprietorship
- Free copy of Lenders Tax Analyzer© software
- Employee training log
- Quiz to measure staff learning and a separate answer key
WHO SHOULD ATTEND?
This informative session is designed for anyone in the lending area including chief lending officers, service representatives, loan sales staff, new accounts personnel, loan officers, loan underwriters, credit analysts, loan processors, branch managers, CEOs, and other key lending staff.
PLEASE NOTE: The live webinar option allows you to have one telephone connection for the audio portion and one Internet connection (from a single computer terminal) to view online visuals as the presentation is delivered. You may have as many people as you like listen from your office speaker phone.
ABOUT THE PRESENTER – Tim Harrington, CPA, TEAM Resources
Tim Harrington is President of TEAM Resources and has been a financial institution consultant for over 27 years. Tim has advised lenders on verifying income from tax returns since 1992, and consults with financial institutions nationwide on issues of strategy, profitability, and board governance. He speaks at nationwide conferences and has presented in Canada, Mexico, Puerto Rico, Jamaica, and the Virgin Islands. Tim is the author of the popular software, Lenders Tax Analyzer. In addition, his book “Eisenhower on Enlightened Leadership” has been used by management teams nationwide to improve leadership skills. He did his undergraduate studies at Gonzaga University and graduate studies at the University of Washington.
Originally recorded on January 24, 2019.
Recorded webinar is available until July 31, 2019.
Free Digital Copy included with purchase to download and view beyond link expiration date.
Price includes sales tax.