We (myself and boyfriend) are trying to purchase our first home. (Due to get married in Dec.!!) Problem is - - when we applied for a loan the loan office wanted to see his Tax form. He gets a 10/99 tax form and it only shows he make $6000 a year..when he really makes around $30-35. Not to mention tips ect,. He works in a nail shop and each week they do not take taxes from him when he gets paid. They do everything at the end of the year...and his boss only claims that he makes $6000 so he wont have to pay as much at the end of the year. My question is how can we prove what he really makes when the State shows he only make $6000? Is this common? Pls someone that knows their stuff!!!
2007-09-06 05:34:30 · 5 answers · asked by Jen 1 in Business & Finance ➔ Renting & Real Estate
He cannot claim that money. What your boyfriend is doing is called tax evasion. It is highly illegal. If you plan on filtering that money through a bank account and purchasing a house with it, Your boyfriend will be audited and will face back taxes and hefty fines.
Banks furnish your deposit and average balance info to the IRS.
What he needs to do is start paying the taxes on that money and then he will have the proper documents to back up his earnings. Or hide that money in a safe and use it only for cash purchases.
2007-09-06 05:43:04 · answer #1 · answered by snwbm 4 · 0⤊ 2⤋
A loan officer who would abet in the evasion of taxes is not someone I could recommend. If someone will assist in cheating the government what makes you think they won't cheat you.
Investors have created loan programs specifically for those who are self employed (100 rather than W2). Because they are considered a higher risk loan they may require a larger down payment, carry a higher interest rate, and require impeccable credit. These are called by a number of different names (SISA, No Doc., NINA, No Ratio, etc.)
Find an ethical and experienced local loan officer and request this option be fully explained so that you may make an informed rather than emotional decision.
Finally, tax evasion is a serious federal offense. Both your future husband and his employer are courting disaster if they continue this course of action. There are a great many nail salons who operate legally, I suggest your fiance find one.
2007-09-06 06:56:52 · answer #2 · answered by mazziatplay 5 · 0⤊ 0⤋
This unfortunately is the downside to cheating the tax system. You claim way less to avoid paying taxes and then you don't have the debt to income to support any type of large loan. I run into this all day long with people who are self-employed and those who tips make up a large majority of their income. Occasionally the lender will allow you to prove your salary with the last 6 months worth of pay stubbs or if your credit is high enough you can possibly get a no-doc loan where you don't have to prove your income. Good luck and tell your husband to be to quit cheating the IRS or you two will be running into this situation every time you apply for credit.
2007-09-06 05:51:06 · answer #3 · answered by annoymous 1 · 0⤊ 0⤋
Looks like a business, and a boyfriend might soon be in trouble for tax evasion. Not just at a state level, but Federal. I would clear this up and with the agencies involved, or at least start doing the right thing this year. By the way as a side note, and interesting fact, for all his criminal goings on they could never catch or convict Al Capone on any of his crimes, they finally got him on tax evasion.
2007-09-06 10:36:51 · answer #4 · answered by Pengy 7 · 0⤊ 0⤋
Three years Income Tax Returns.
The best and only accurate proof.
2007-09-06 05:42:39 · answer #5 · answered by ed 7 · 0⤊ 1⤋