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im selfemployed and on my 1099 is $ 44,137.00. do the lenders look at whats on my 1099 or whats left after my taxes and biz expenses? started doing my taxes online (late as hell) and when i put in biz expenses it showed me grossing $ 22k. the loan im applied for needs me to gross around $ 40k. if i dont write off biz expenses ill have to pay $ 16k in taxes. i can def afford the mortgage because ive got other unclaimed income.

5 Thoughts on 1099 question for a mortgage loan?
  1. Reply
    June 15, 2012 at 12:17 am

    The reason that they ask for your tax return is that only your “claimed” income counts toward qualification for a loan. The figure that they will use is the net (after deductions) or AGI. Look at it this way, please count my “illegal money” just does not sound so good.

  2. Reply
    June 15, 2012 at 12:27 am

    What the lenders will ask you for is a copy of your tax return, and being self-employed they might also want a copy of your schedule C. And what they will look at will really be your net income on the business. As far as the other unclaimed income goes, if you don’t get a 1099 or anything that requires you to declare it on your tax return I would not try doing one tax return that shows the unclaimed income for the bank, and another tax return that doesn’t show the unclaimed income for the IRS. That could get you in a lot of trouble if it was ever found out that you had two different tax returns.

  3. Reply
    June 15, 2012 at 12:43 am

    The simplest solution is to claim all your income and qualify for the mortgage. The mortgage company is looking at your net income as shown on your Schedule C.

    If one year’s tax return shows insufficient net income, you could provide several years tax returns.

    If your yearly income is insufficient, then you’ll have to get a smaller mortgage by saving up and making a larger downpayment.

  4. Reply
    June 15, 2012 at 1:25 am

    If you’ve got ‘other unclaimed income’ not only are you late in filing your taxes, you’re cheating.

    How much money do you have to put down on the house? If you are trying to get a 95% or 100% loan, it is likely that you will have to document all of your income using tax returns. That leaves you two choices – claim all of your income or don’t claim your business expenses.

    If you have 10% or more to put down, you may be able to get a no-documentation loan, depending on your credit score.

  5. Reply
    June 15, 2012 at 1:44 am

    They would probably look at the amount on the 1040, and that would be after your business expenses are taken out.

    “Other unclaimed income” sounds illegal – you’re looking for major trouble down the line when the IRS catches up to you. And returns from self-employed people do often get looked at, since there’s a lot of fraud going on there. You’d be wise to declare all of your reportable income. With having half of your income as expenses, you could be a prime target for an audit.

    If your “other unclaimed income” is something NOT reportable like child support, then please forgive my assumption.

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