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Here's my situation: I'm currently under contract on a home. I was pre-approved by my lender for an FHA mortgage but because I work partially on commission, they are wanting 2010, 2011, and 2012 tax returns.
Here's the problem: I was unemployed for most of 2010 and just filed my taxes for that year about 3 weeks ago along with my 2012 taxes. After finding out a few days ago through my own research that my unreimbursed employment deductions (mostly mileage) would knock about $20k off my gross income, I amended my return, took the standard deduction, and overnighted it to the IRS. I definitely make enough money to cover the payment, but subtracting that much from my gross income would absolutely put my DTI far too high to qualify.
My 2 year anniversary with my current company is in April, and my lender has maintained all along that as long as we don't close before that date, that I'd be fine (since you have to have 2 years to count commission as income). She originally only asked for my '10 and '11 returns, but the problem is that I didn't have this job in '10 and I didn't start there until late April '11, so the income on those tax returns doesn't accurately reflect the last 24 months of earnings.
It was supposed to take 6-8 weeks for them to process my 2010 return, and I'm guessing it will be at least that long to process my amended return for '12. She said she would talk to her underwriter, but that she was pretty certain that they would have to have actual transcripts, which apparently take forever to get even after they've processed your return.
What exactly are my options here? Am I just completely screwed?
Woah, wait, which tax return did you amend? 2012? Were you under contract when you did that?
Yes, 2012 was the one I amended. I wasn't aware that I would need my 2012 tax return because the deadline to file hasn't even hit yet. The problem is that they can't verify any of my income based on my 2010 return or really even my 2011 since I was only there for 8 months.
Nobody cares if the IRS has processed your amended return, unless you are expecting a refund and need the cash.
If you have submitted the amended return to the IRS, then give the lender the copies of what you have submitted, including the amendment. If you signed it and submitted it, it is official. Heck the IRS might not process it for months.
Nobody cares if the IRS has processed your amended return, unless you are expecting a refund and need the cash.
If you have submitted the amended return to the IRS, then give the lender the copies of what you have submitted, including the amendment. If you signed it and submitted it, it is official. Heck the IRS might not process it for months.
That's the problem though, the underwriter is saying they must have official transcripts from the IRS.
That's the problem though, the underwriter is saying they must have official transcripts from the IRS.
That is correct...did they have you sign Form 4506-T, which allows them to request the taxes directly from the IRS? I think that's pretty standard for most lenders.
I'm also in the buying process and am not scheduled to close until the end of June but I should probably submit my taxes now so there is enough time for them to be processed and such.
That is correct...did they have you sign Form 4506-T, which allows them to request the taxes directly from the IRS? I think that's pretty standard for most lenders.
I'm also in the buying process and am not scheduled to close until the end of June but I should probably submit my taxes now so there is enough time for them to be processed and such.
Yes, they had me sign that form. However, apparently it takes months for the IRS to make tax transcripts available, even after they complete your returns. I guess I'm just screwed, because I just don't see anyway to get them by the end of April in order to close.
Here's the problem, you can use 2012 returns if you can prove those are the ones filed. IRS is not releasing transcripts at this time........depending upon what you amended will determine how big your problem is. For example, if you amended your return to INCREASE your income (whether by lowering expenses or declaring more income), you have a serious problem. However, if its a minor issue, like you left off bank interest and are amending your return to show an additional $40 income, you should be fine. You can prove the 2012 returns have been filed by either a refund or a canceled tax payment. Amended returns are MANUALLY reviewed, and are at the very bottom of the pile after they get thru the 2013 tax season.
If you are getting any other answers to this ("must have transcripts"), your lender is working with investor overlays and not delivering directly into the Fannie Mae or GSE secondary markets.
Here's the problem, you can use 2012 returns if you can prove those are the ones filed. IRS is not releasing transcripts at this time........depending upon what you amended will determine how big your problem is. For example, if you amended your return to INCREASE your income (whether by lowering expenses or declaring more income), you have a serious problem. However, if its a minor issue, like you left off bank interest and are amending your return to show an additional $40 income, you should be fine. You can prove the 2012 returns have been filed by either a refund or a canceled tax payment. Amended returns are MANUALLY reviewed, and are at the very bottom of the pile after they get thru the 2013 tax season.
If you are getting any other answers to this ("must have transcripts"), your lender is working with investor overlays and not delivering directly into the Fannie Mae or GSE secondary markets.
I amended my income and took a standard deduction instead of itemized. I was going to have to amend anyway, because the tax software I used didn't have anywhere to include the amount my employer reimburses me for mileage, so I was getting back too much and didn't realize it until I had already e-filed. I could have still claimed some unreimbursed employer expenses, but chose not to when I amended because I didn't want it affecting my taxable income.
Why exactly is that a serious problem? People make mistakes on their taxes all the time. I can prove the amount that my employer reimburses me for mileage if a lender is worried about that.
I amended my income and took a standard deduction instead of itemized. I was going to have to amend anyway, because the tax software I used didn't have anywhere to include the amount my employer reimburses me for mileage, so I was getting back too much and didn't realize it until I had already e-filed. I could have still claimed some unreimbursed employer expenses, but chose not to when I amended because I didn't want it affecting my taxable income.
Why exactly is that a serious problem? People make mistakes on their taxes all the time. I can prove the amount that my employer reimburses me for mileage if a lender is worried about that.
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I definitely make enough money to cover the payment, but subtracting that much from my gross income would absolutely put my DTI far too high to qualify.
It's 100% crapshoot right now. You are giving the appearance you manipulated your return to qualify. All amended returns are done manually and take a while to be processed (as in months).
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