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How is income determined if I’m self employed?

First off, congratulations on being self employed. We think that’s awesome 🙂

If we’re qualifying your income using traditional methods, we’ll need to have at least two years of you reporting your self employed income to Revenue Canada.  Here’s what we’ll  need to have a look through to figure out your qualifying income.

If you are incorporated then we’ll need:

  • your two most recent personal tax returns
  • your two most recent notices of assessment showing that your income taxes are paid in full
  • your company financials for the previous two years so that we can prove your corporation is financially stable
  • your incorporation documents to confirm who the owners are and when it was established
  • we’ll use a two year average of your personal taxable income to qualify you for your mortgage

If you are not incorporated, then we’ll need:

  • your full personal tax returns for the last two years, including the statement of business and professional activities.
    • some lenders will allow us to add back different expenses, or gross up your income. It’s our job to know who does what, so we’ll go through your returns once we’ve got them and determine what income can be used to help you qualify.
  • your two most recent notices of assessment showing that your income taxes are paid in full

What if you haven’t been self employed for two years, or your taxable income is not an accurate reflection of what you make? We’ve still got options. Click here 🙂

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