topic Re: Anticipated yearly bonus - reported income in Credit Cards

Anticipated yearly bonus - reported income

Duncanrr — Sat, 12 Oct 2013 00:14:10 GMT

I've never included my annual bonus in reported salary for credit cards or other applications as its not always an guaranteed amount. I'm curious how others handle this.

Thoughts

Re: Anticipated yearly bonus - reported income

Anonymous — Sat, 12 Oct 2013 00:30:47 GMT

@Duncanrr wrote:
I've never included my annual bonus in reported salary for credit cards or other applications as its not always an guaranteed amount. I'm curious how others handle this.

Thoughts

Well in cases like this, it's best to just write whatever income you earned last year. That way, you have all the necessary documents to back it up, if they ask for it.

Re: Anticipated yearly bonus - reported income

red259 — Sat, 12 Oct 2013 00:38:26 GMT

@Anonymous wrote:
@Duncanrr wrote:
I've never included my annual bonus in reported salary for credit cards or other applications as its not always an guaranteed amount. I'm curious how others handle this.

Thoughts
Well in cases like this, it's best to just write whatever income you earned last year. That way, you have all the necessary documents to back it up, if they ask for it.

+1 Some people have really small salaries, but at the end of the year get a huge bonus. Its unfair to get credit limits set based on a small salary, which is a fraction of what you will be earning by the end of the year. That being said bonuses are not guaranteed, so I think Enharu's advice is the best compromise. You don't want to be in a situation where you give them a number and then you don't get the bonus and then there is a FR later on and you can't back up what you told them.

Re: Anticipated yearly bonus - reported income

Revelate — Sat, 12 Oct 2013 00:44:17 GMT

@Anonymous wrote:
@Duncanrr wrote:
I've never included my annual bonus in reported salary for credit cards or other applications as its not always an guaranteed amount. I'm curious how others handle this.

Thoughts
Well in cases like this, it's best to just write whatever income you earned last year. That way, you have all the necessary documents to back it up, if they ask for it.

+1.

That said I'm not certain that I can claim my bonus as income when it comes to my theoretical mortgage I'm going to try to get underwritten next year.

Re: Anticipated yearly bonus - reported income

youngandcreditwrthy — Sat, 12 Oct 2013 01:33:20 GMT

I've received the same amount of bonus every year.. So I include it.
I've had the same position for about three years, so I feel my proclamation is warranted in that regard.

Re: Anticipated yearly bonus - reported income

Anonymous — Sat, 12 Oct 2013 01:42:01 GMT

I always put my previous year tax returns as my income stated on an application. It is just easy to verify if I ever had to. Although I see nothing wrong with including bonus' from the current year just always be prepared to have it documented just incase you need to show it to a company if asked.

Re: Anticipated yearly bonus - reported income

Pat94108 — Sat, 12 Oct 2013 01:45:27 GMT

Personally, I include bonuses now when I apply for credit cards but it's not like they make a huge difference in my salary (Got about 5k this year) either so I don't feel bad about it.

Re: Anticipated yearly bonus - reported income

Duncanrr — Sat, 12 Oct 2013 01:53:09 GMT

My bonus at last job varied greatly. Im not sure how new job will be with them other than i know i will get an incentive based one. Typically, my bonus ranged from 5% - 15% of my base salary.

Re: Anticipated yearly bonus - reported income

youngandcreditwrthy — Sat, 12 Oct 2013 02:05:47 GMT

Yeah, the bonus always gets reported and taxed heh -.- lol

Re: Anticipated yearly bonus - reported income

red259 — Sat, 12 Oct 2013 02:13:25 GMT

@Pat94108 wrote:
Personally, I include bonuses now when I apply for credit cards but it's not like they make a huge difference in my salary (Got about 5k this year) either so I don't feel bad about it.

Yea 5k isn't a huge difference. When I first read the question I was thinking of the traders on wall street where they get paid a small salary and get these massive bonuses at the end of the year. In that situation it can be drastically different.

Re: Anticipated yearly bonus - reported income

wHiTeSoL — Sat, 12 Oct 2013 06:12:23 GMT

I think it's ok to include bonuses. No bank is going to get angry at normal variations. I'd say +/- 10%

Re: Anticipated yearly bonus - reported income

Revelate — Sat, 12 Oct 2013 09:04:10 GMT

@wHiTeSoL wrote:
I think it's ok to include bonuses. No bank is going to get angry at normal variations. I'd say +/- 10%

That *really* depends whether they think that 10% differential makes you overextended.

I agree with the other posters, I won't put anything for income I can't prove easily either by paystubs or tax returns. I derive an additional 30% compensation between bonus and pension per year, but it'd be all sorts of awkward to claim either potentially except via tax returns in the bonus's case.

Re: Anticipated yearly bonus - reported income

Anonymous — Sat, 12 Oct 2013 15:56:25 GMT

Wow, it had never occurred to me to INCLUDE my bonus! Or to use my AGI instead of my actual gross income!

My bonus is small relative to my salary, like 6%, so I don't think it would make me much of a difference in terms of credit limits.

AGI can be affected by what you do in terms of 401(k) contributions and such, so I wouldn't use that. I'd use the regular gross. It's a number you know off the top of your head, probably, and you don't have to dig up any paperwork.

Re: Anticipated yearly bonus - reported income

frugalQ — Sun, 13 Oct 2013 01:11:31 GMT

I include my bonus in my income even though what is on my tax return is lower.

I get my bonus (and an annual raise) in March for the previous year's work, so my pay stubs match what I state although my tax return doesn't.

For the poster who said you can't include bonus for mortgage: actually, some lenders allow you to take the avg of the last two years bonus and include as income....as long as you are w2 and can show that you consistently receive a bonus each year.

Re: Anticipated yearly bonus - reported income

sccredit — Mon, 14 Oct 2013 00:05:54 GMT

I use my previous year's AGI, mainly because I have a very complicated income. I have a base salary, bonus, and multiple businesses/investments that flow through to my personal return (my personal return I filed this morning was literally 127 pages). I have steadied off over the past few years so if proof is ever required I can use a 3 year tax return basis for income claims. As my loan officer said when buysing my house last year "you claim what you pay taxes on"

Re: Anticipated yearly bonus - reported income

Revelate — Mon, 14 Oct 2013 00:19:29 GMT

@frugalQ wrote:
I include my bonus in my income even though what is on my tax return is lower.

I get my bonus (and an annual raise) in March for the previous year's work, so my pay stubs match what I state although my tax return doesn't.

For the poster who said you can't include bonus for mortgage: actually, some lenders allow you to take the avg of the last two years bonus and include as income....as long as you are w2 and can show that you consistently receive a bonus each year.

Oi vey, that's handy Q, thanks!

Have to see if whatever lenders I pick will wind up playing ball on that one: it'd effectively raise my claimable gross income by an additional $1k/month under that standard. That plus the theoretical raise my silly company has promised in the annual salary adjustment next year, maybe this is doable for a decent house even in the absurdly expensive S. Cali LA south bay area.