Hello,
I am preparing to submit my application for pre-approval and have some questions about mortage computation of income and tax returns.
I have a full time employment for the past 6 years, and the W2 incomes for the past two years is shown below - for 2011 and 2012. In addition I do occassional consultancy work, resulting in yearly 1099s since 2011, as shown below:
2012:
- W2 Gross = $70,000
- 1099-MiC = $11,000 (Profit = $0)
- Taxable Income: $45,000 (because of loss generated from 1099 + Itemized Deductions)
2011
- W2 Gross = $56,000
- 1099-MiC = $36,000 (Profit = $5,000)
- Net Income: $0.00 (because of lots of deductions due to casualty losses from fire)
1. My first question is are underwritters interested in gross income or taxable income, and why?
2. My tax accountant did not include the 1099 in my 2012 filling, so I want to file an amended tax return before the IRS come chasing me. Is it adviceable to do this given that I intend applying soon. Or would it be better to just go ahead and apply - without including the 1099 for 2012?
3. Now, I have taken a lot of deductions against my income, resulting mostly from casualty losses for 2011 and other business deductions in 2012, resulting in reductions in my net income. What is the implication of this huge deductions and reductions in my net income?
4. My 2013 income situation will not be much different from 2012. What will be the strategy here - forgo a lot of deductions in order to increase my taxable income?
Thanks very much,
Oy
