Self Employed Income

Fannie Mae – Self-Employed Income: Can I use the personal returns of a self-employed borrower to document income, or do I also need business tax returns? [NEW Calculator – Fannie Mae Form 1088 – Business Income Comparative Analysis]

Answer: This really depends on whether or not your borrower meets the exception for waiving the requirement for business tax returns.  See the highlighted portion below.  If your borrower is not exempt, then the lender will need to evaluate the business income.  If the business income is required to be analyzed, Fannie Mae has a [...]

2019-01-25T08:37:53-05:00January 25th, 2019|

Fannie Mae – Self Employed-Meals and Entertainment Deduction- Why does the FNMA Cash Flow Analysis require us to deduct “meals and entertainment” when this is already accounted for in the net income/loss?

Answer: This is a good question because it doesn’t seem logical until you understand IRS rules for deduction of meals and entertainment. When self-employed borrowers show a deduction on their taxes for “deductible meals and entertainment”, they deduct this amount and it lowers the Net Profit or adds to the Net Loss. On the FNMA form [...]

2018-09-25T09:35:10-05:00September 21st, 2018|