Review and Calculate Income from a 1040 with 2106 Expenses
[Pages:44]Review of W-2 Wages, Tax Statement & Employee Business Expense Form 2106
Tax Return Series Part I March 2017
Genworth Mortgage Insurance Corporation
?2017 Genworth Financial, Inc. All rights reserved.
Materials You Will Need
? 1 Form 91 Worksheet ? Tax Return 1040's for Connie Commissions ? W-2
2106 & 2106-EZ
2
Objective
Learn to use Freddie Mac's Form 91 to calculate supportable income using tax returns Complete Freddie Mac's Income Analysis Form 91
? Review W-2 Form ? Calculate Expenses reported on a 2106 (Un-reimbursed Business Expenses)
? Schedule A ? 2106 Worksheet
2106 & 2106-EZ
3
Verifying Employment Income
What Not to Ask-
"How Much Do You Make?" About $50,000
$39,850!!
2106 & 2106-EZ
4
Verifying Employment Income
The Interview- Let's talk about how you get paid...
Do you Receive an Annual Salary? Are you Paid by the Hour?
? If yes, what is your hourly rate? ? How many hours do you work per week?
? Are your hours scheduled or per diem? ? Do the amount of hours vary week-to-week? ? Do you work year round or is your position seasonal?
Do you Receive any Commission Or Bonus Income? ? If yes, have you received it for the past two years? Has it declined? Do you expect to continue receiving it?
?
2106 & 2106-EZ
5
Base Income Entry
2106 & 2106-EZ
6
Verifying the Qualifying Income
A minimum history of two years of employment is recommended. However, in certain circumstances income that has been received for a shorter period of time may be acceptable. Each file is reviewed individually.
Base Pay (Salary and Hourly)
Obtain the following documents: ? A Completed Verification of Employment (Form 1005) or ? The Borrower's Recent Paystub & W-2 Forms (covering the most recent two-
year period). A 1005 may be required to document the income types included on the W2.
? The paystub must be dated no earlier than 30 days prior to the initial loan application and it must include all y-t-d earnings.
? They must be computer generated or typed by the employer.
? A Verbal Verification of Employment (VVOE) ? Fannie Mae & Freddie Mac require lenders to have each borrower (regardless
of income source) complete and sign a separate IRS Form 4506-T at or before closing.
2106 & 2106-EZ
7
Base Income and Commission Entry
Commissions must be
averaged & annualized!!
If you are using commission income to qualify your borrower you must: Confirm receipt for the past two years, determine that it is regular & reoccurring (not declining) and calculate the % of income the commission earnings represent of the monthly qualifying income. If the commission earnings represent 25% or more of the income you must review the borrower's tax returns to determine if they have filed a 2106 expense form
2106 & 2106-EZ
8
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related download
- review and calculate income from a 1040 with 2106 expenses
- retirement expense worksheet wells fargo
- form 433 b rev 2 2019 irs tax forms
- benefits of budgeting what if my income or expense
- chapter 13 calculation of your disposable income
- spending plan worksheet rutgers university
- startup costs worksheet small business
- monthly living expenses calculator guide
- make budget worksheet form
- budgeting worksheet greenpath
Related searches
- calculate payments on a loan with interest
- calculate monthly income from annual salary
- calculate monthly income from 401k
- calculate dividends from income statement
- calculate net income from balance sheet
- calculate retirement income from savings
- how to calculate yearly income from hourly
- calculate table income from net wages
- calculate net income from w2
- how to calculate acceleration from a graph
- calculate gross income from annual salary
- calculate retirement income from 401k