02-17-2013 06:58 AM
So I have aside business in 2011 and 2010 took a loss after itemizing cost etc. so this brought down my average income. I am looking to my taxes and bring up this average. Do all deductions and credits bring down my income or just business losses or unreimbursed expenses on my w2. For example. I have 3k in student loan interest which I would like to deduct but not if it hurts my ratios.
Also I am applying for usda in my name only, my wife has a side business. Since the loan is in my name if she takes any deductions or write offs does this hurt if she lets say post no income?
02-21-2013 07:25 PM
Student loan interest deduction doesn't impact your ratio - only actual expenses. So assuming you file a Schedule C for your self-employed business, if you take any depreciation & depletion, that can actually be added back in to your qualifying income.
Your wife's side business won't impact your qualifying income as long as she's not on the loan application. Even in a community property state where the non-borrowing spouse's debts are considered, business losses from the non-borrowing spouse aren't considered (since it's not a debt).
If you haven't filed your 2012 tax return, then after it's prepared and before you file, you may want to ask a loan officer to review it so they can help calculate how much qualifying income you'd have off of the 2011/2012 tax return averages.