Tax Filing Strategy #2 – Every Ex Self-Employed Person Must Know This
Every year hundreds of thousands of small businesses are created. This also means many will be dissolved and close their doors for good. For anyone who is trying to buy or refinance a home and intends to write off losses from a business venture that didn’t take off they will be hit for those losses towards their qualifying income. Every ex self-employed person who is now salaried and applying for a loan must know this when filing taxes because it can make or break a loan approval. So, what do you do if this is you? There are two things you can do. First, make sure the business is completely dissolved prior to applying for your loan and second, only write off the minimum losses you need to limit your tax liability which will preserve your qualifying income. Don’t worry, you won’t miss out on claiming any losses. Business losses can be written off over multiple tax filing years. The best thing to do is consult an accountant and/or tax professional, tell them you are trying to qualify for a mortgage to buy or refinance a house, and let them tell you the best way to spread out the business losses over time while maximizing today’s income.
For those of you who are currently self employed and want to know the three schedule C expenses that can be added back to your bottom-line total to boost your income and purchase power click here. And for those of you who would like to know more about usable income click here.
By David Hughson
Mortgage Planner & Tax-Filing Alarm Clock