Mortgages, while your business?

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I have a business and I am the only person that I am not cut arbeiten.Ich a paycheck, and this is my first full year of work for my company. My question is, how can I prove my income to the lender? If the only way to prove my income to the lender by check or payroll, I cut a check from the beginning of the year, and how to respond to the IRS?

3 Comments
  1. Reply
    A Hunch
    May 1, 2011 at 5:22 am

    You need 2 years of tax returns to get a traditional loan.
    You are eligible for whats called a “low document loan” (named for the lack of documents that you have). You will need at least 20% down and the interest rate is about 2% higher than what you would get if you could better prove your income.

  2. Reply
    Landlord
    May 1, 2011 at 6:18 am

    You use your income tax returns. If you show no income there you will not be getting a mortgage.

  3. Reply
    loanmasterone
    May 1, 2011 at 6:42 am

    Depending on the type and how your corporation is set up would depend on how the federal government would look at the corporation from a tax stand point.

    Most are currently setting up LLC thus any income or loss is directed at the management and member of the LLC.

    “S” and “C” corporations are different tax entities, thus in some cases both the corporation and the individuals are taxed.

    Normally lenders would accept bank statements as proof of income for business owners and this is the same as w-2 or pay stubs. Ideally you would need a minimum of 3 years of federal income tax returns if running a business.

    Your CPA or tax preparer would be in the best position to determine if cutting you a pay check, w-2 and pay stubs would benefit you in any tax situation. There are many companies that would charge you a fee for setting up our pay schedule, issuance of pay stubs and at the end of the year a w-2.

    If you are computer savvy and have knowledge of the various local and federal income tax deductions, there are many software programs available for your use.

    Compare the cost in time and energy as well as knowledge required for you to do this chore or farm it out to a knowledgeable person or company.

    For tax and legal matters it is best to consult with your tax preparer and attorney.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

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