| Posted By |
Message |
Ltdentway99
LIF Adult
Member since 9/06 1752 total posts
Name:
|
Mortgage and 1040 questions
Hi ladies!
I have a quick question regarding getting a loan for a house. I spoke to a mortgage banker about how much of a loan I want to take out. According to our 1040 we do not make enough to get the loan. Here's the thing... We actually do because my husband has a side business that we didn't report. I think we should amend the 1040 and pay the taxes. I think this is my only option. We both are not getting raises at our jobs any time soon. Any feedback would be appreciated. Thanks.
|
Posted 5/19/12 5:25 AM  |
| |
|
Long Island Weddings
Long Island's Largest Bridal Resource | Prudential Douglas Elliman Real Estate |
Karen
Just chillin'!!
Member since 1/06 9690 total posts
Name:
Karen
|
Re: Mortgage and 1040 questions
Unfortunately it's not that simple. Although reporting it is certainly the right thing to do, you are probably going to open up a whole can of worms that is going to take a lot of time and money to rectify.
How many years has the side business been operating? If it's only been a year or two, it wouldn't be a big hassle to report, but it might not be sufficient for a mortgage.
Is the side business a substantial portion of your income (you may run into fraud issues with the IRS for not reporting it).
Does he have employees? I assume he hasn't been paying payroll taxes? Even if he doesn't have employees, if he is self-employed he needs to pay self-employment taxes.
I would definitely talk to a CPA about handling this, as this could become a really big project.
Message edited 5/19/2012 8:51:05 AM.
|
| Posted 5/19/12 8:49 AM |
| |
|
Ltdentway99
LIF Adult
Member since 9/06 1752 total posts
Name:
|
Re: Mortgage and 1040 questions
Hi! It is a small side practice. It is self-employment. No one on the payroll or anything. He just started this business a year ago or so. Thanks!
|
| Posted 5/19/12 10:41 AM |
| |
|
Karen
Just chillin'!!
Member since 1/06 9690 total posts
Name:
Karen
|
Re: Mortgage and 1040 questions
I would definitely try and get it straightened out on your taxes, but I don't think a year or so of self-employment income is going to help you with a mortgage.
Hopefully someone with better mortgage knowledge can chime in.
|
| Posted 5/19/12 2:52 PM |
| |
|
NYCGirl80
I love my kiddies!
Member since 5/11 10413 total posts
Name:
|
Re: Mortgage and 1040 questions
Posted by Karen
I would definitely try and get it straightened out on your taxes, but I don't think a year or so of self-employment income is going to help you with a mortgage.
Hopefully someone with better mortgage knowledge can chime in.
ITA. You could have to pay back taxes and a huge fine if you're audited. Or worse, he could have to serve jail time for tax fraud. Is it worth it for the few dollars you're saving in taxes?
|
| Posted 5/23/12 10:54 AM |
| |
|
ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
|
Re: Mortgage and 1040 questions
Posted by NYCGirl80
Posted by Karen
Posted by Saphire01
Hi ladies!
I have a quick question regarding getting a loan for a house. I spoke to a mortgage banker about how much of a loan I want to take out. According to our 1040 we do not make enough to get the loan. Here's the thing... We actually do because my husband has a side business that we didn't report. I think we should amend the 1040 and pay the taxes. I think this is my only option. We both are not getting raises at our jobs any time soon. Any feedback would be appreciated. Thanks.
I would definitely try and get it straightened out on your taxes, but I don't think a year or so of self-employment income is going to help you with a mortgage.
Hopefully someone with better mortgage knowledge can chime in.
ITA. You could have to pay back taxes and a huge fine if you're audited. Or worse, he could have to serve jail time for tax fraud. Is it worth it for the few dollars you're saving in taxes?
I agree.
It's one thing if you want to cheat on your taxes by not reporting legit business income. But the OP also wants her cake and to eat it too by using that unreported income to qualify for a mortgage.
I think the better option would be to use that unreported income and just save up and put a larger down payment down which will qualify you for more house.
Message edited 5/23/2012 11:28:40 AM.
|
| Posted 5/23/12 11:27 AM |
| |
|
CSK
LIF Adolescent
Member since 9/11 892 total posts
Name:
|
Re: Mortgage and 1040 questions
See I thought the right thing to do is to report the income you earn, like the rest of us have to do....
|
| Posted 5/23/12 12:25 PM |
| |
|
Karen
Just chillin'!!
Member since 1/06 9690 total posts
Name:
Karen
|
Re: Mortgage and 1040 questions
Posted by ave1024
I think the better option would be to use that unreported income and just save up and put a larger down payment down which will qualify you for more house.
This solves one problem and creates another. The mortgage company is going to want to know where that money came from.
You have to prove the nature of that money (i.e. gift, loan, salary, etc.) so what are you going to tell them - yeah, it's unreported income from my side business???
|
| Posted 5/23/12 9:05 PM |
| |
|
