Form 433 A
Form 433-A is a tax document completed and provided to the Internal Revenue Service. It is also known as a Collection Information Statement for Wage Earners and Self-Employed Individuals. The purpose of this form is to document earnings from someone who does not have a standard financial background. In short, there income varies. In addition to information about finances, the person completing the form will also need to include information about personal and business assets as well as expenses for the business. This information helps ensure that the right amount of taxes is collected from the taxpayer.
What is a Form 433 A?
A Form 433-A is known as a Collection Information Statement for Wage Earners and Self-Employed Individuals. This form is related to filing taxes in the United States, and will be kept on record by the Internal Revenue Service. This form can be used by people who do not have a standard financial situation. Â The IRS often requires this form when an individual owes more taxes than they have the ability to pay.
The first section of the form requires your personal information, so that the IRS can identify the taxpayer. If you own a business, you will then need the business’ information in the next section. Information about your employment is next, and you may need to include attachments that verify your earnings. This is typically at least three months’ worth of invoices, pay stubs, or other documents that show your earnings.
The final sections will detail your personal assets and business assets, expenses, and information about your sole proprietorship. This information is required so that the right amount of taxes are withheld from each filer.
Most Common Uses
This form is commonly used by a party who has a tax bill that you do not have the ability to pay. Â The IRS may choose to settle your tax debt for less than what you owe if you meet certain requirements. Â The decision is made on a case-by-case basis and is dependent on your individual circumstances, such as your income, expenses, owned assets, and how much the IRS thinks you are reasonably able to pay.
Components of a Form 433 A
A Form 433-A contains sections for:
- Personal information
- Employment information
- Other financial information
- Personal asset information
- Monthly income and expenses
- Business information
- Sole proprietorship information
How to complete a Form 433 A (Step by Step)
To complete a Form 433-A, you will need to provide the following information:
- Personal information
- Full name of taxpayer and spouse
- Address
- Phone numbers
- Name, age, and relationship of dependents
- Marital status
- SSN and date of birth
- Driver’s license number and state
- Employment information
- Employer’s name, address, phone number
- Length of employment
- Occupation
- Number of withholding allowances on Form W-4
- Pay period
- Other financial information
- Lawsuit information
- Bankruptcy information
- Whether you have lived outside of the U.S. for 6 months or longer in the past 10 years
- Beneficiary of trust, estate, or life insurance policy
- Trustee, fiduciary, or contributor of a trust
- Safe deposit box
- Whether you have transferred any assets for less than their full value in the past 10 years
- Personal asset information
- Cash on hand
- Personal bank account information
- Investments
- Available credit
- Life insurance
- Real property
- Personal vehicles leased and purchased
- Total equity
- Monthly income and expenses
- Total income including: wages, interest, dividends, net business income, net rental income, distributions, pensions, social security, child support, alimony other income
- Total expenses including: food, clothing, housing, utilities, vehicle ownership and operating costs, public transportation, health insurance, out of pocket health care costs, court ordered payments, child/dependent care, life insurance, current year taxes (income/FICA), secured debts, delinquent state or local taxes, other expenses, total living expenses
- Business information
- Whether business is a sole proprietorship
- Name and address
- Employer identification number
- Type of business
- Whether business is federal contractor
- Business website
- Total number of employees
- Average gross monthly payroll
- Frequency of tax deposits
- Whether business engages in e-commerce
- Payment processor information
- Credit cards accepted by business
- Cash in hand
- Business bank accounts
- Accounts/notes receivable
- Business assets
- Sole proprietorship informationÂ
- Accounting method used
- Period of accounting
- Total monthly business income: gross receipts, gross rental income, interest, dividends, cash receipts, other income
- Total monthly business expenses: materials purchased, inventory purchased, gross wages & salaries, rent, supplies, utilities/telephone, vehicle gasoline/oil, repairs and maintenance, insurance, current taxes, other expenses
Best Practices
You will typically need to attach the following documentation to your Form 433A:
- Last tax return
- Proof of income for the last three months
- Bank statements for the last three months
- Current brokerage and/or annuity statements
- Credit card statements for the last three months
- Statements from insurance companies showing the cash value, loan value, and/or surrender value of your policy
- Current statements from mortgage lenders
- Proof of your business’s income and expenses for the last three months if you’re self-employed
- Proof of all current expenses for the last three months
- Proof of all transportation expenses for the last three months
- Proof of all health care expenses for the last three months
- Proof of any court-ordered payments for the last three months
