1. While you may be able to get pre-qualifed to buy a home based on your income taxes that you just had done, it may take up to 30 days after your taxes are filed before you can actually enter into a contract to buy a home. Reason being is that it takes about that long before the government logs your taxes that you've just filed and they are usable for your loan officer to work with. So, if you are needing to have your taxes done before you purchase a home, do them sooner than later.
2. If you are someone who files a 1099 for your income taxes, then it is likely you have some write-offs you incorporate into your income taxes from business expenses. If you are looking to buy a home in the next year or so and you file a 1099, you will want to talk to your tax adviser as well as a loan officer Long before your house hunting process starts. We have a lot of people who file 1099's here in LA and so it is very common that we see people who make a very good living, but can't qualify for a loan. And the reason is that when people write things off from their personal income, it reflects how much income is seen actually seen as being "earned". So if you've been writing off a lot for a number of years, it may take a year, or two or even three of doing your taxes differently before you may be able to qualify for that home you want depending on how much you earn and how much you've written off.
3. Property taxes are a great write off every year...but remember this: While you can write off points from a loan and certain fees from the purchase of a home, property taxes will be prorated depending on when your home was purchased. So unless you've owned that home for the full year, you won't receive the full year of tax benefits for owning that home until the following full year.
4. If you change the way you file taxes in the middle of the year, such as going from a W2 to a Schedule C or from a Schedule C to an S Corp then please talk to a loan officer as soon as possible if you are thinking of buying a home in the next year. They will need to guide you through how to best do this.
So I hope those few points can help you out but the biggest point I should make, is that you should be talking with your tax adviser as well as a loan officer long before your home search begins. And if you don't have a loan officer, I have a great one I've worked with many times who can help guide you through all these tax related questions as well as many other questions you may have about purchasing a home. Feel free to contact Michael Razak at michael@madisonlendinggroup.com or 818.288.6851 Tell him I sent you. And when you are ready to buy or sell, give me a call. I am always here to help.
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