Tax season is here.  So is the busy season for real estate professionals.  This being the case, I always try to get my taxes done ASAP.  That means that I get them in by the end of January and I get my return by the middle of February.  This way, I have more of my CPA's attention and I'm not killing myself trying to do my complicated taxes during the busiest time of my work year. 

For the last couple of years I've filed a 1099 C along with my regular w-2 wages.  My other jobs have been sporadic and the self employed income is the only way I can prove a steady job for the last 2 years (which is required for most loans).  Still, when I'm getting financing for a loan, be it a purchase or a refi, I can't actually show my tax documents because an underwriter or mortgage professional is responsible for any information that they receive, even if it's not what I intended them to see.  (I should know this, I'm a mortgage professional.  And, when I'm doing a "stated" loan, I always go out of my way to tell my clients NOT to show me any income documentation, because after that I have to use the numbers that I've seen, even if they are only part of the client's income, etc.) 

Anyway, the way that a self employed borrower proves the consistency of thier employment without compromising they're stated income is this: they get a letter from the person that prepared their taxes which states that the taxes were prepared by a licenced tax professional and that there was self employment income filed in a 1099 C.  That's all. 

This is the case with my situation.  And I have a warning for all of you. 

Choose a CPA that is willing to write the letter.  Find out if they are willing ahead of time.  Last year, I had to the letter from H&R Block and there was no problem.  This year, a different person with H&R did my taxes and this particular person gave me the sharpest, rudest remarks I've heard in a long time, and insisted that she doesn't write letters of any sort on behalf of anyone, and that she didn't care if it meant I couldn't refinance. 

This may never happen to you.  But I would encourage you to take steps to insure that it doesn't.  For starters, ask about it before you start submitting your tax information.  Second, choose a better, more experienced CPA than I did.  I won't use H&R block again and I will spend more money next year to make sure that things are done right and that I'm treated with respect.  It's no fun to be treated like your nothing more than a number.  I wouldn't treat any of my clients that way and I don't think you would either.  Unfortunately, there are people who are not a concientious as we are.