I need some advice. I searched online and couldn’t find anything that would give me some good info on it.
I am self-employed and have been self employed for about 5 years now.
I currently pay about $2,000 a month in rent for the past 3 years.
I take advantage of every tax deduction I can and thus – my adjusted gross income is very low (20,000). For example, taking a home office deduction, contributing to IRA, etc.
I want to take out a $300,000 mortgage.
Will I be not allowed to do this because my adjusted gross on my taxes is low?
I can amend my return and not take as many deductions and raise my adjusted gross income. This is not ideal – but if it is the only way I can get a house I would rather not take the deductions.
My fear is that my income on my cash flow statement would be much larger than what is reported as my adjusted gross income. Is this something I can explain or would I be screwed if I don’t amend my return? Along with that – do I need to amend the last 2 returns? Or is 1 sufficient.