Decrypting Personal Tax Returns Part 1: Form 1040, Schedules B & C

Learn how to decrypt Form 1040, Schedules B and C, and convert taxable incomes into reliable monthly or annual cash flow statements. With practical techniques and the free Lenders Tax Analyzer© software provided, you will gain the skills to transform tax data into actionable insights for credit scoring, debt-to-income analysis, and disposable income calculations.

What does a lender need from a personal tax return? Cash flow. Cash flow pays back the loan. However, tax returns do not show cash flow directly. They show taxable incomes. Therefore, a lender needs the “secret code” to decrypt a tax return and obtain a reliable monthly or annual cash flow.

In Part 1 of this two-part series, you will learn to cash flow the front page of Form 1040, Schedule 1 (which covers a wide variety of taxable incomes), Schedule B (interest and dividend incomes), and Schedule C (sole proprietorship incomes). With this process, and the free Lenders Tax Analyzer© software that each registrant receives, you learn an easy and reliable method to convert a borrower’s personal tax return (Form 1040) into a borrower’s cash flow statement.