What counts as income?

[sarge12]

I need some info here. I recieve 2200 dollars a month in SSDI benefits. In addition to that I have a large sum of money in 401k and retirement accounts that I can draw any amount out of that I wish. The less of this I draw out the less SSDI income is taxed, so I try not to draw too much out each year. When requesting CLI or CC apps I always get a little hung up on income. Since my actual income is SSDI + whatever amount I wish to withdraw from these accounts. What should I actually be putting down as income? I just recently was denied a cli for the reason of my overall credit limits are too high compared to stated income.

[Believe1970]

What counts as income:
Before the Credit CARD Act of 2009, it seemed as though everyone with a pulse could get a big credit line. Today, that’s no longer the case. The CARD Act requires lenders to extend credit only when they believe the borrower has the ability to repay it. The income you report on your credit card application is one way creditors decide how much credit they should extend to you, if any.

According to an amendment to the CARD Act, borrowers over 21 can list any income to which they have “reasonable expectation of access.” This broad definition includes:

Personal income
Income from a spouse or partner
Allowances and gifts
Trust fund distributions
Scholarships and grants
Retirement fund distributions
Social Security income
Borrowers between ages 18 and 21 can report only independent income, which typically includes:

Personal income, including regular allowances
Scholarships and grants
Right now, there are no specific legal guidelines about how irregular income should be calculated. But generally, you should report only income that can be verified by tax returns, a letter or some other document.

“Use common sense,” says Ira Rheingold, executive director of the National Association of Consumer Advocates. “If you can’t prove the income exists, you shouldn’t list it.”

Remember, when your issuer assigns you a credit limit based on your income, it’s not a trust fall. If you default, your creditor won’t be there to catch you; it’ll be asking for its money back.

[Believe1970]

This is what I found when I googled it. Hope this helps.

[Anonymous]

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@sarge12 wrote:

I need some info here. I recieve 2200 dollars a month in SSDI benefits. In addition to that I have a large sum of money in 401k and retirement accounts that I can draw any amount out of that I wish. The less of this I draw out the less SSDI income is taxed, so I try not to draw too much out each year. When requesting CLI or CC apps I always get a little hung up on income. Since my actual income is SSDI + whatever amount I wish to withdraw from these accounts. What should I actually be putting down as income? I just recently was denied a cli for the reason of my overall credit limits are too high compared to stated income.

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In your case, while it's unfortunate as it doesnt accurately reflect how much money is within reach, you are stuck with only claiming your SSDI and any interest or capital gains you might have each year or whatever money you took out on average in the last few years..  You cant claim as income the money that you could potentially withdraw.

[sarge12]

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@Believe1970 wrote:
What counts as income:
Before the Credit CARD Act of 2009, it seemed as though everyone with a pulse could get a big credit line. Today, that’s no longer the case. The CARD Act requires lenders to extend credit only when they believe the borrower has the ability to repay it. The income you report on your credit card application is one way creditors decide how much credit they should extend to you, if any.

According to an amendment to the CARD Act, borrowers over 21 can list any income to which they have “reasonable expectation of access.” This broad definition includes:

Personal income
Income from a spouse or partner
Allowances and gifts
Trust fund distributions
Scholarships and grants
Retirement fund distributions
Social Security income
Borrowers between ages 18 and 21 can report only independent income, which typically includes:

Personal income, including regular allowances
Scholarships and grants
Right now, there are no specific legal guidelines about how irregular income should be calculated. But generally, you should report only income that can be verified by tax returns, a letter or some other document.

“Use common sense,” says Ira Rheingold, executive director of the National Association of Consumer Advocates. “If you can’t prove the income exists, you shouldn’t list it.”

Remember, when your issuer assigns you a credit limit based on your income, it’s not a trust fall. If you default, your creditor won’t be there to catch you; it’ll be asking for its money back.

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OK so from this I think since I normally withdraw 1500 per month gross from these accounts with 300 witheld for taxes I can safely count 1200x12= 14,400 of income in addition to the SSDI. Thanks for finding this, I had tried google with little success.

[Anonymous]

It's normal and customary to use GROSS income, when stating income vs NET ....
So $1500 x 12 months $18k is as fair game to you as anybody else.... applications ask for gross income because everyone's tax implications are all over the place, it's always the gross number😉

[echoecho]

Sarge12 I think you got the same situation as I am. Your tax form should verify all those info if requested. With only partial ssdi taxable and retirement accts non taxable, when looking at the bottom line it seems not high at all. If you add your end of year ssdi, 401k, retirement 1099, cap and dividend income it gets up there as if your still working. Every time I do my tax I always say I don't feel like I got this amount of money every year. Wife always always ask what you do with that money irs said you made.

[sarge12]

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@echoecho wrote:
Sarge12 I think you got the same situation as I am. Your tax form should verify all those info if requested. With only partial ssdi taxable and retirement accts non taxable, when looking at the bottom line it seems not high at all. If you add your end of year ssdi, 401k, retirement 1099, cap and dividend income it gets up there as if your still working. Every time I do my tax I always say I don't feel like I got this amount of money every year. Wife always always ask what you do with that money irs said you made.

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When I was working I made a lot more income, but I was putting so much of it in 401k that the money I had left over was less than I have now. Since all that 401k money is deffered, I am only limited by how much I am willing to give the IRS. With personal exemptions and such I try to pay 0 tax. If I withdraw too much it makes some of SSDI taxable. I differ from you in that I took all my pension as a lump sum rollover into a deferred savings account...which was a lot, but now it is tax deffered just like 401k.

[echoecho]

Ya but its good to know that irs cant touch your money other than as normal income if you really need it with ssdi. Available options are always good.