Common Tax Questions
What do you do if you need a mortgage now, and your lender is asking for your 2018 W2, but you don’t have it yet? If you are self-employed and need your 2018 income to qualify for a mortgage, but you haven’t filed your 2018 taxes yet, is that OK? Here are the answers to the most common tax questions that pop up this time of year.
If you haven’t received your 2018 W2 from your employer yet, that’s not a problem at all. Even though employers have until January 31 to send you your W2 for the previous year, you can still get a mortgage without the W2. Your final pay stub for 2018 will show your total income for the year, and that pay stub is acceptable proof of your income.
If you are self-employed and you need your 2018 income to qualify for a loan, there are two options. The first is to file your taxes and use the tax returns to prove your income, just like you would at any other time of the year. The second option is to have your CPA prepare an audited Profit and Loss statement for 2018. Although this option will cost you more money because you will have to pay for the P&L, it will usually allow you to get a mortgage sooner than if you had to wait for your income taxes to be prepared.
Many people receive tax refunds when they file their income tax returns, and a common question is whether they can use the refund for their down payment and closing costs, even though the money may not be in their personal bank account for very long. The answer to that question is yes, you can always use money you recently received for your down payment and closing costs, as long as it is from an acceptable source. Income tax refunds are an acceptable source of funds, so all you would need is a copy of your bank statement showing the IRS as the source of the deposit.
These are the three most common questions we are asked regarding mortgages and income tax returns at the beginning of the year. If you have additional questions, give us a call, send us a text, or email us and we’ll be happy to give you an accurate answer.