Basics of Tax Returns Analysis

Written By: Hina Habib

The way we can handle both business and personal tax returns is pretty much same. The key to the right analysis is to opt for right direction. We can divide the analysis procedure in 3 steps.

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In the first step for analyzing both personal and business tax returns, make sure that we have all the pages to the returns including the schedules showing other incomes. All incomes are listed on the first page of tax returns. This first page will give you information for income earned in the last years and also if there are any losses claimed. Once you have every schedule and documents supporting incomes listed, your first step completes.

Now in the second step you will start working on the incomes one by one. Start from the top of the first page of tax return. For example if your first income showing is W2 you will gather the supporting documents which may include paystubs and W2 .Verify wage earner income against these forms. Now you go to the next income and for example, if this is a schedule C income, you will require complete schedule C and any other document pertaining to receipt of this income. Hence same way you will keep going towards the bottom of your 1st page of tax retune going through all the incomes listed for each borrower.

In the last step once you have all income calculated then you check your income guidelines with the lender you are using. You also at this point write the entire question you have regarding the tax returns. You might have some question for your borrower and some for the lender. Just make sure that you should ask borrower first what you need clarification on and then go through the tax return one more time to see what you have left to ask from Lender. You also can recheck your calculated income with the worksheets provided by different lenders.

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I hope this article has provided little in sight for tax return income analysis. In my next article I will discuss tax returns analysis for Wage Earner employees.

About The Author

Hina Habib - As an NAMP® staff writer, Hina Habib has been working as a Loan Processor with mortgage industry for more than 15 years now. Hina is a loan processing instructor for Loan Processor University ( She has ample experience of structuring and processing FHA, VA and Conventional loans. She worked with an established Correspondent Lender/ Mortgage Broker for 13 years. After her promotion as a Senior Loan Processor she trained loan officers and other processors. Currently she is working with a strong and established banking institute as a Mortgage Processor II. She is very well informed with the current on going changes in the mortgage history and can help answer your questions more accurately. If you're interested in becoming a writer for NAMP®, please email us at:

Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.