| The IRS is tightening up it's income verification and this affects an income verification tool used by lenders. Lenders now have a fast, easy way to find out if you're stretching it financially... |
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| The IRS is tightening up it's income verification and this affects an income verification tool used by lenders. Lenders now have a fast, easy way to find out if you're stretching it financially... |
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Self-Employed May Find Mortgages Harder to Get
Think again. The games gotten tougher and the stakes are higher. The IRS is tightening up it's income verification and this affects an income verification tool used by lenders. Lenders now have a fast, easy way to find out if you're stretching it and they won't have to jump through hoops to do it. I had to jump through hoops at a poor tiger's version of Sigfried and Roy-I can tell ya-it ain't no fun. All the lender has to do is go online and talk to the IRS's computers and in one to two business days the cat will be out of the bag.(Don't get me started about cats being in bags in the first place). How's that possible? Well back in the day, (actually until Friday, September 29 2006) a lender had to fax a form called a 4506-T to the IRS. This form allows authorized parties to get a copy of you tax transcripts for up to 4 years. Tax transcripts summarize income and tax data. You have to sign the form and its only good for 60 days after the signing. Until that fateful Friday, this was all done non-electronically. Way to slow for todays lenders computerized, high speed mortgage process. What this meant was that a lot of mortgage lenders simply skipped reviewing the transcript on their way to GO. They used the transcripts as quality control on closed mortgages. Not so anymore. It is expected that more lenders will be asking for 4506-T's and using the the transcripts in approving mortgages. This increased verification may put the nix on what's called “stated income” loans aimed at the self- employed. In these loans, the applicant simply swears on his/her grandmother's grave that yes, they can pay the mortgage. They don't have to cough up W-2, tax returns or other usual suspects. Now, the lenders have real live ammo to flush out applicants who are lying about their income. These people may face prosecution and/or be subject to audits by the IRS. Since you'll be more likely to be asked to fill out one of these things (4506-T) you should read and follow the directions for the 4506-T closely Complete every box on the form. Write N/A if it doesn't apply. In particular, make sure you date it and list the tax years. Signing an incomplete 4506-T is an open invitation to identity theft. Remember the lender only has 60 days to check you out and can only check out the tax years you say they can. If you leave it open, you're basically giving them “Whenever Minutes”. If you need help filling these out, give us a call or stop by the office. We'll be happy to help. One last thing, I'm starting a new part of this column called Ask the Tiger: Write in to this paper to ask me anything except about that Tigress who broke my heart. All your Tax & Finance questions will be answered here. Don't be shy, if you don't look like Sigfried, I won't bite.
The Tiger,
Elizabeth Marasco , MBA, Mike Bronstein CPA Source: Information for this
article was originally published in the Washington Post Saturday,
September 30, 2006; Page F04 (If we're not doing taxes, we're
doing our homework ).
Elizabeth Marasco,
MBA |
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Comparing outsourcing with in-house solutions
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Outsourced bookkeeping
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Give Bookkeepers Plus a challenge! An easy way for business owners to get first-hand experience on our services. Give us a challenge and we'll tell you how we would solve it... free! Give us a challenge involving outsourcing of accounting services... |
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| Different functions of bookkeeping — read to see what you can benefit: | ||
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Billing & Accounts Receivable Explained in understandable form what is included in accounts receivable and what you need to look out for in this area. |
Accounts Payable & Cashflow / credit What functions are included and how do these influence your finances and credit rating — and how do you speed up the cashflow? Learn the importance of accuracy in accounts payable for your activity! |
Purchasing & Inventory -controlling cost Keeping accurate record on purchasing and inventory allows for optimizing of your stock and investment while minimizing downtime. Read what outsourcing the purchasing & inventory functions can benefit you! |
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Banking routines This area of bookkeeping frees up a lot of your time while ensuring your funds arrive promptly and securely. Read what benefits you receive by outsourcing the banking duties to an accounting professional. |
Cash Management How would you like to be free from constant worry and checking of your cashflow and receive some control and prediction to finances? How cash management can increase your financial control and prediction. |
Payroll outsourcing Calculating salaries is the most time-consuming of all activities. Outsourcing your payroll you gain accuracy at lower cost than handling it in-house. |
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Financial Management Reporting The absolute jewel of services, ensuring that you gradually gain full control over financial planning in your company. Management Reporting teaches you to plan finances hands-on with accuracy and profits! |
Project Accounting An essential service if you have larger jobs or projects coming up which you want to keep under tight financial control. Quality service giving greater financial control. Project Accounting - how to keep the budget and finances of any larger job or project under control! |
Taxes and preparing books for your CPA Why not save some 50% off this part of your accounting by letting our bookkeepers prepare taxes and books for your accountant / CPA? Save money and headaches by... ...outsourcing tax work and preparation of books for accountant's review. |
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Useful articles for LI business owners This page contains articles by Elizabeth Marasco on various subjects relating to taxation, finance, accounting, bookkeeping and other important issues. Read Elizabeth Marasco's articles on taxation and accounting in Long Island and New York |
Bookkeepers Plus Virtual Assistant Don't need a full-time secretary or can't afford one? Then the solution is the Bookkeepers Plus Virtual Assistant - you pay only for the work we performed at the quality requested! Bookkeepers Plus Virtual Assistant - secretarial work without the cost. |
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Other Credits and Collections actions These tasks are not very spectacular if done accurately and correct. But if you forget then many unnecessary problems can arise from... ...Petty Cash , Employee Reimbursements, Business Expenses, and Vehicle Mileage tracking |
Bookkeepers Plus Office Software Application Training Read how businesses throw away thousands of dollars monthly... and how you can make sure you don't... and secure it for free! Bookkeepers Plus Office Software Application Training & Consulting |
Sales Tax Keeping accurate record on your sales tax and filing in time is not exciting and thus it suits outsourcing well. Save money while avoiding all problems due to delays or mistakes... See the savings and benefits available from outsourcing your sales tax routines! |
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Getting the most out of your QuickBooks? Participate in this survey to find out! Want to see if you are receiving the true benefits from your QuickBooks software... or check if it could help you more than currently? Take this online survey on QuickBooks to find out... and receive a free initial phone consultation! |
About Bookkeepers Plus Inc. Introducing Bookeepers Plus Inc. — the outsourcing expert for businesses in Long Island NY. |
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