Advise Needed from Lenders: Tax Returns Weight on Loan Application

[Benjie DeVera]

Hi, I'm currently working on my 2014 taxes. This 2014 taxes will be the most complicated one by far, with itemizing RE expenses, etc. I do have an EA doing it, so I'm just trying to plan for 2015, as I plan to purchase another property with a loan.

Question for residential lenders or banks: What part of the income tax returns affect the loan amount application? Does having a low AGI on income tax returns affect the loan amount, or not really?

For example, if I deduct all my rehab expenses as a "repair" and not "improvement", it's well possible that my AGI will be very low, and pay low taxes. This is good for me because I pay less taxes now.

On the other hand, if I tell my EA to expense it as an "improvement", and depreciate rehab over 27.5 years,  it would result me a higher AGI. Not a fan of this, because I pay higher taxes. But will this haunt me when I apply for a residential loan? 

In short, Do AGI's really matter when applying for a residential loan? If not, what part of the tax returns really matter when someone is applying for a loan?

(I do know that DTI, credit score, report, and W2s and paystubs are looked at)

Can some accountant or lender weigh in on this please? Thanks in advance! :)