Commission or Self Employed? How do you calculate income?

I work with many clients who are either self employed or get paid on commission. Often times when I inquire about my client's income, they state a figure before any deductions and in most cases I am required to use a lower amount for income. I do not believe my clients are lying to me, but they may not understand how banks calculate income. How do banks calculate commissioned and self employed clients? Most investors require two years of employment in the same line of work. What you can do to figure your income is add the last two years gross income after all of your tax write off's. Take the number and divide by 24. They want your monthly average for the last two years. I put an example below.

2005 Income   2006 Income Months   Income Used
($75,000.00 + 62,000)     /     24 =    $5,708.33

In some cases business owners and commissioned employees may want to choose a stated income or no documentation loan.  Make it a great day!