Tax Returns
Bwr states he only receives 1040 Tax returns, what is his business type?
What is Sole Proprietorship?
Asset Calculation? What procedure(s)?
What is Housing Expenses (HOA/Tax/HOI), mortgage payment, DHL payment x 2 months? What is PB Quick Guide?
Bwr: "I just work for myself, I don't work for any business or anything. I just file my taxes"
What is Sole Proprietorship non independent contractor?
Can we proceed? Why or why not?
My business has 2+years, but I filed a loss last year
Yes, because UW calculates based on the trend from the last two years filed and the YTD P&L, but the loss may impact the income figures.
Do we add a business that closed within the last two tax filing years? If yes, where? and if not, why?
Yes, in Loan App > Previous Employment
Bwr files business tax returns but no K1s
What is Corporation?
What type of accounts can we use for Assets?
Personal accounts that are Checking, Saving, Money Market, CD, or Retirement Accounts (401k, 401a/b, Roth IRA/IRA, Mutual Funds, etc.)
Bwr: "I'm an LLC"
Probe business type using Self Employment Guide with process of elimination. "Do you file personal and business tax returns?"
Can we proceed? Why or why not?
I have bank deposit statements of all my earnings and my balance sheet, can I send that instead of my tax returns?
No, because we require a 2-year history for self-employment per Appendix Q "Minimum Length of Self Employment", Self Employment Guide, and Income Document Requirements Job Aid
If a bwr's business owns rental properties, where do we add the income?
With the business income (Loan App > Current Employment) since business owns the properties
Bwr only 1 year with the current business and has 1 year filed with a business that closed out. Can we include the income?
Yes, bwr reflects two years of self-employment history per Appendix Q "3. Minimum Length of Self Employment."
The Partnership we weren't including as income is reporting as a loss on tax returns. Do we require assets?
Yes, we require assets
C-Corps and S-Corps require the same documentation, true or false?
False, C-Corp files 1120 taxes, S-Corps file 1120S taxes and gets K1s.
Can we proceed?
"I was self-employed from 10/01/2021-08/01/22 and filed, but then closed that business down and started a new one 07/01/2023 and filed my taxes."
No, although bwr has 2 years of taxes filed, the bwr doesn't have two years of total self-employment history
What business type do we NEVER select?
LLC
Bwr didn't file 2023 tax returns, what can they send?
What is 2022/2021 Tax returns and a 2023 P&L Statement?
Justin stated that he only has $200 between his personal checking and savings account, but he has the $6,000 Asset Requirement in his Roth IRA account. Are we able to proceed? Why or Why not? What resource did you use?
Yes, due to Systems & Strategies update 9.18.24, we can utilize retirement accts for assets
Procedures: Acquisitions, LPG, PB Quick Guide
Bwr indicates she files K1s, what business type might she be?
What's S-Corp or Partnership?
Can we proceed?
App Date: 11/22/23. Today's Date: 11/31/23
"I started my business in 2021, I have my tax extension for 2022, would that suffice?"
No, tax extensions expire 10/15
Where can we find the income breakdown?
Workbench > Income Calculator
Bwr was 1099 on his tax returns for the last 10 years as a Lawyer, but started filing their taxes as an S-Corp in 2023. Can we use this income?
Yes because there's a two-year history of self-employment income.
Bwr sent a $1,200 deposit into his checking account to meet the asset reserve requirement, and it only shows on his most recent bank statement. How do we proceed?
UW discretion depending on LOE for the deposit, but deposits must be seasoned which is why we request 2 months of bank statements.
What is Full Time Employment?
How do we proceed?
"I don't want to use WPM Tech Support as income, just my HC Consulting income, I had a loss last year for WPM."
Advise that we will need to add WPM on the application as well due to the loss reported on their tax returns.
Net O reflects bwr's income
2022: $3,000 monthly, 2023: $3,400 monthly, 2024: $6,000 monthly
What years are a more consistent trend? Why?
2022 and 2023 because 11.76% increase 2023-2024 is a 13.33% increase and 2022-2024 is a 100% increase