Increasing stated income to qualify...

[Matt Liu]

So admittedly I have some flexibility with how I file taxes since my income comes from my sole proprietorship (music teaching). I'm planning on stating around $25,000 in income this year (a lot for me) in order to help qualify for an FHA home purchase this spring. However, I want to reduce my taxable income with itemized deductions to around $10,000. Will the FHA loan officer still look at the $25,000 gross for DTI and everything? My deductions will largely be home office, travel, student loan, and some education expenses. Thanks!

[Bill Gulley]

The only "expense" that is added back to income is depreciation as it is not a cash expense. Any cash expense you claim for taxes is a reduction to income, can't have it both ways. :)