The Income Dilemma
Posted on | May 11, 2009 | No Comments
One of the things that have drastically changed over the past several years is the tracking of income. This comes into play for all people who are self employed or make compensation in the form of commissions or tips. For those some who are self employed, including commissionable earners, are caught between taking legitimate expenses and keeping their tax bill low or not taking those expenses and showing enough income to get approved for a loan. It’s a hard decision that has to be made year to year and before they even know if they would qualify anyway. Unfortunately, loans are calculated on what they actually make while other loans are calculated on the gross income. Doesn’t always make sense but that’s the way it works.
Similarly, those that collect tips have to decide if they will claim all their tips or not to show enough income to be approved for a loan. If you are in one of these situations, remember that it is not how much you make overall that counts, it’s that bottom line on your tax return after expenses that will be counted. It is also averaged over a two year period to come up with a workable income. It may not be fair but it is the way it is.
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