Life can be unpredictable, and sometimes these surprises can lead to financial difficulties. Recent data shows that 61% of Americans report recent price increases that have caused them financial hardship, up from 55%.
This might mean losing your job or facing a large tax bill that seems impossible to pay. If you’re among those struggling, there might be a way to ease your burden when dealing with the Internal Revenue Service (IRS).
IRS Form 433-A, also known as the Collection Information Statement for Wage Earners and Self-Employed Individuals, is a form that lets you demonstrate your financial challenges. In this post, we will explain everything you need to know about Form 433-A to help you understand how it can potentially provide some relief and 433A instructions.
IRS Form 433-A is used to give the IRS details about your finances, including your income, expenses, assets, and debts. This form is needed when the IRS requires financial information from you to figure out how you can settle your outstanding tax debts.
IRS Form 433-A is sometimes needed by self-employed individuals. It’s typically used when you’re trying to set up a payment plan with the IRS for your taxes due to financial difficulties. If you’re considering this route, Keith Jones Tax Relief can be your best option to give a call to. Here are a few options you might consider with their help:
These options can help manage your tax situation without adding too much stress during tough times.
IRS Form 433-F, also known as the Collection Information Statement, is a simplified version of the financial statement used by individuals to provide the IRS with information about their income, expenses, assets, and liabilities. It is typically used when the IRS needs to evaluate a taxpayer’s financial situation to determine payment options for outstanding tax liabilities.
Form 433-F is a concise 2-page document used by a wide range of taxpayers to quickly provide basic financial information to the IRS. In contrast, Form 433-A is more comprehensive, designed specifically for wage earners and self-employed individuals who file a Schedule C. The main differences are:
Exclusions: Not needed if you owe less than $50,000 and are eligible for a streamlined installment agreement.
Note: If your tax matters are managed by a Revenue Officer, you will need to complete Form 433-A or Form 433-B instead
IRS forms can be challenging to understand. To make it easier for you, we’ll guide you through IRS Form 433-A, explaining each section and the Form 433A instructions required. Below, you’ll find clear instructions on how to complete Form 433A.
This section collects comprehensive personal information to help the IRS understand the taxpayer’s living situation and dependents, which may affect their financial capacity and tax obligations.
Additionally, it asks for information about:
The below employment details help establish the taxpayer’s ability to pay based on their employment stability, income frequency, and deductions that may affect disposable income.
For the Taxpayer:
For the Spouse:
Note: If you or your spouse have self-employment income instead of, or in addition to, wage income, complete Business Information in Sections 6 and 7.
The goal of this section is to identify any additional financial obligations or assets that could impact the taxpayer’s overall financial situation, such as involvement in lawsuits or bankruptcy.
In this section, taxpayers provide a snapshot of their personal assets, offering the IRS insight into their liquidity and net worth through the details of their bank accounts, investments, and property.
This part is designed to give a month-to-month overview of the taxpayer’s living costs and income streams, setting the stage for a realistic repayment plan by calculating the net monthly income.
Income Sources:
Total Income: Sum all income lines to get the total monthly income.
Living Expenses:
Total Living Expenses: Sum all expense lines to calculate the total monthly living expenses.
Net Amount: Subtract total living expenses from total income to determine the net amount available each month.
By detailing business structure and financials, this section helps the IRS assess the business’s health, its contribution to the taxpayer’s income and potential payment plans.
Business Profile:
Business Operations:
Financial Details:
Cash on Hand and Bank Accounts:
Receivables:
Outstanding Balance: Calculate the total outstanding balance of receivables.
Property Description: Provide details about each significant business asset, such as tools, machinery, or equipment.
Location: List where each asset is located, including street, city, state, ZIP code, and country.
Lender/Lessor Information: For any assets that are financed or leased, include the name, address, and phone number of the lender or lessor.
Value and Loans: State the current fair market value of each asset, the current loan balance against it, the amount of the monthly payment, and the date of the final payment.
Equity: Calculate the equity in each asset, which is the fair market value minus any loan balance.
This section focuses on a sole proprietor’s business finances, offering a summary of the business’s monthly profitability and ongoing expenses, pivotal for understanding the taxpayer’s financial picture.
Monthly Income: Detail your monthly business income, including:
Total Monthly Business Income: Sum up all income sources to calculate the total business income for the month.
Net Business Income: Subtract the total expenses from the total income to determine the net business income. If the business operates at a loss, indicate “0” for net income.
Notes:
This section aims to provide a clear view of the financial performance of the business over the selected period, giving the IRS an understanding of the business’s profitability.
Note: Section 7 should be completed only if you are SELF-EMPLOYED.
Completing IRS Form 433-A is a key step for individuals and businesses facing tax obligations and looking for relief through structured payment plans or compromises.
The high rate of electronic submissions, with 213.3 million tax forms filed online accounting for 78.6% of all filings, and a striking 90.7% of individual tax returns being submitted this way, underscores the efficiency and accessibility of handling tax matters digitally. This trend towards online filing simplifies the process, making it more manageable and faster for taxpayers to comply with IRS requirements.
However, the details required in Form 433A, which involve disclosing comprehensive financial information, can be complex. In this context, getting help from a tax professional can not only help you accurately complete and submit your forms but can also negotiate with the IRS on your behalf and navigate the electronic filing system effectively. Their expertise can be invaluable, especially in ensuring that you take advantage of all possible avenues to reduce your tax burden and set up a manageable payment plan.
What is the difference between Form 433 A and 433-A (OIC)? Expand
Form 433-A is a collection information statement for wage earners and self-employed individuals. 433 A Form (OIC) is a specific version used when applying for an Offer in Compromise, which is an agreement with the IRS to settle your tax liabilities for less than the full amount owed.
How do Form 433-A and Form 433-F differ? Expand
Form 433-A is detailed and for self-employed individuals or wage earners with complex tax situations. Form 433-F is a shorter, more condensed collection information statement that may be used by a broader range of taxpayers.
Where should I mail Form 433 A? Expand
Keith Jones can determine the proper mailing address for you to send your completed Form 433-A to the appropriate IRS office based on your specific location and circumstances. With his expertise, he can provide you with the correct address to ensure the form reaches the right IRS office, rather than just guiding you.
Where can I download 433 A Form ? Expand
Keith Jones can find and provide you with the correct version of Form 433-A from the appropriate IRS resources. He can walk you through the process step-by-step to ensure you download and access the form accurately. You don’t have to worry about locating the right form.
How can I get help with Form 433-A? Expand
Keith Jones can provide personalized support to help you with Form 433 A. He can explain the details of the form, offer strategies for presenting your financial information favorably, and act as a liaison with the IRS to ease communication. You don’t have to worry about navigating the form alone.
What other services can Keith Jones provide besides helping with IRS Form 433-A? Expand
Keith Jones can provide IRS audit representation, serve as an IRS wage garnishment attorney, offer optimal tax relief solutions, and help resolve issues with back taxes. You don’t have to worry about handling these matters alone when utilizing his expertise.
Form 433-D: Effective Strategies for Optimal Filing Outcomes Filing Form 433-D, Installment Agreement, is a crucial part of managing and resolving IRS tax liabilities. This form is for individuals or businesses that cannot pay their taxes in full. It helps them set up a payment plan with the IRS. Below are some powerful tips to […]
