These Tax Write-Offs Will Block Your VA Loan

Securing a VA loan as a self-employed veteran requires providing specific financial documentation to prove stable and ongoing income. Here is a summary of the key points:

• Two-Year History: Lenders typically require a minimum of two years of self-employment history to verify your income's consistency.
• Required Documents: You will need to provide two years of personal and business tax returns, a current Profit and Loss (P&L) statement, and a balance sheet.
• Income Calculation: Underwriters generally calculate your qualifying income by averaging the net profit from your last two years of tax returns. However, if income has declined, the lower, more recent figure may be used.
• Tax Write-Offs: Business deductions reduce your qualifying income, but non-cash expenses like depreciation can often be added back by the lender, which may increase your borrowing capacity.
• 1099 Contractors: Independent contractors are treated the same as business owners and must meet the same two-year history and documentation requirements.

Read the full blog article here: https://www.iqratemortgages.com/blog/va-loan-for-san-diego-business-owners-a-california-guide