NEED ADVICE

[Anonymous]

Finally got some pre approvals but since i get paid commission my tax returns are needed.  I owe 15k in taxes for 2015 and still have an agreeent for 2014 at 170 a month.  do all lenders require tax returns.  Its kicking my butt that i cannot get a home

[Anonymous]

Yes, as far as know all lenders require tax returns. Your situation is part of the reason why, any obligation to creditors or in this case the IRS gets factored into your DTI ratio.

[Imperfectfuture]

For my self employment, I set aside a certain percentage of each payment, so can pay taxes when owed. Seems it would be easier if you did quarterly taxes?

[Anonymous]

i think i need t o change my withholding options.  it is KILLING ME

[ezdriver]

---

@Anonymous wrote:

Finally got some pre approvals but since i get paid commission my tax returns are needed.  I owe 15k in taxes for 2015 and still have an agreeent for 2014 at 170 a month.  do all lenders require tax returns.  Its kicking my butt that i cannot get a home

---

I don't get that statement. I am 100% commission too ... but I'm also  W2 employee. The fact that you are on a commission-based compensation plan is not the issue. What is the issue is how much net income you earn after taxes, depreciation, etc. Sounds like you are not ready to purchase a home if your are so far behind in your tax payments. At the end of the day, your payments to the IRS will be treated like payments to any other creditor to determine your DTI. This is a very common conundrum for self employed people. You did not state what your annual income is but I am assuming that it is such that you are struggling to pay the income taxes on that income. Work on that and then look at purchasing a home is the best that I can suggest.

[Anonymous]

im not struggling to pay it. my income is 95k yearly but it still sucks to have to pay so much.  i pay the payment plan i have on time 

[StartingOver10]

---

@Anonymous wrote:

im not struggling to pay it. my income is 95k yearly but it still sucks to have to pay so much.  i pay the payment plan i have on time 

---

Self employment is a two edged sword. Speak to a CPA, you might consider having an LLC so you aren't paying self employment tax on gross revenue.  A CPA can give you more accurate, detailed tax information.

Take  a look at your payment plan with the IRS to check the terms of the actual agreement you have with the IRS. If I am not mistaken you need to make sure 2015 is paid in full. I don't think they will authorize another payment plan for your shortfall in years subsequent to the current payment plan.

Also, if you are on a payment plan, it doesn't prevent you from getting a mortgage. The lender just needs to see the agreement and that you are making the payments on time. Speak to your LO about it. 

[iv]

---

@Anonymous wrote:

Finally got some pre approvals but since i get paid commission my tax returns are needed.  I owe 15k in taxes for 2015 and still have an agreeent for 2014 at 170 a month.  do all lenders require tax returns.  Its kicking my butt that i cannot get a home

---

Yes, tax returns required, via the 4506T.

But you have a much bigger issue if you are underpaying estimated taxes by that much, multiple years in a row.

If your income and expected taxes were largely the same between 2014 and 2015, and you still underpaid by 15k for 2015, you are very likely to end up paying a percentage of the underpaid amount as a penalty, in addition to the tax itself.

[Anonymous]

---

@Anonymous wrote:

im not struggling to pay it. my income is 95k yearly but it still sucks to have to pay so much.  i pay the payment plan i have on time 

---

Just provide the tax returns. Since, as you indicate, the debt isn't a burden, it shouldn't be too much of a negative.