Question about my tax returns during underwriting (loan, fixed rate, 2013)

[Gymgoer6]

Hi everyone,
I am in the underwriting stage of our fixed rate loan. Underwriting has our 2011 tax return and 2012 tax return preparation. My broker asked if I had filed the 2012 return with the IRS (currently have an extension). I didn't, but I am going to have my CPA do so this week.

What I'd like to know is when we prepared our taxes, we ended up doing a bunch of deductions (self-employed), which ultimately would lower our loan amount if we decided to buy a home this year. Since the time that we did the preparation, in the meantime we decided to buy a home. Since the underwriters have the preparation and things haven't been officially filed, can I have my CPA re-do my taxes to erase my deductions, file, give the updated return to underwriting and then proceed with the loan?

I would rather pay more in taxes than have a commitment for a lower loan amount?
Thanks you.

[stan4]

Confused...why would it lower your loan amount?

[Gymgoer6]

Hi Stan.
It would lower my amount because the underwriters are using my net profit from the business. I had x amount of thousands which were business expenses, such as travel, meals, etc.
Had I known we were going to buy a house this year, I would have claimed very few or no deductions, raising net profit. I will pay more in taxes, but that is ok with me for this year.
We knew rates were at an all time low and decided to pull the trigger.
Thanks.

[SmartMoney]

Are you under contract to purchase? Or is this a preapproval? Pulling back your tax returns to increase your income is going to 1) create some serious eyebrows raising, or, 2) have the UW decline the loan on the spot.

What I don't get, most lenders require transcripts from the IRS to confirm the taxes they have are the actual taxes filed with the IRS.

If you are only in the preapproval stage, get yourself together, suck up the tax penalty and file, or go with the lower loan amount. Get that taken care of first, before buying. And if you are under contract.....well, wow. Working with an online lender?

[bigal777]

I wouldn't amend your taxes. You will surely be audited by the IRS.

[Gymgoer6]

Hi all,
Thanks for the responding.
We are under contract.
My 2011 tax return and 2012 tax return preparation is with underwriting, I have an extension until October 15 to file and pay.
My loan processor was thinking my current 2013 profit and loss would be utilized because it is almost thriple my 2011 income, so he advised me to make my usual deductions on 2012.
Underwriting is only using 2011 and 12 we are just finding out. Had I known that, I wouldn't have done my deductions for 2012. 12 is double 11 so 11 was hunkering me down a bit.
I did my 2012 preparation, which underwriting has. Underwriting checked to see if they were filed and didn't have any record. This is my first home purchase and I got confused as to how an extension to file would play a role.
My question is, since underwriting has nothing official, would it be ok for my CPA to redo my 2012 tax preparation and eliminate my deductions, then I file and proceed? I do not want to raise eyebrows or have my loan denied, I just figured they have nothing official with just my preparation?

Edit this is not an online lender.
Edit 12 is not double 11, but much higher.
Edit, I am paying my taxes as soon as I file . I'm not amending.
Thanks,

[SmartMoney]

Your lender isn't requiring transcripts to see that the taxes they have are definitely the taxes filed? Personally, I think the risk is greater than the reward. 9 out of 10 underwriters that had any hint of switching out taxes would kill the deal. It's the appearance of impropriety. Files are now electronic and only senior levels have the authority to remove documents.