Income worksheet
Income Calculation Worksheet
Texas Trust Mortgage · Loan Qualification
Section 1 — W-2 Base Employment Income Salaried & hourly wage earners
| Pay Frequency | Gross Pay / Rate | Avg Hours per Week (hourly only) | Monthly Income |
|---|---|---|---|
| $ | $0.00 |
Conversion formulas
Hourly: rate × hours/wk × 52 ÷ 12 • Weekly: × 52 ÷ 12 • Bi-weekly: × 26 ÷ 12 • Semi-monthly: × 24 ÷ 12 • Annual: ÷ 12.Verify with most recent paystub (30 days), W-2s for prior 2 years, and VOE. Use base pay only in this section — enter variable pay in Section 2.
Section 1 Monthly Base Income$0.00
Section 2 — Overtime, Bonus & Commission Variable income — 24-month average
| Income Type | Prior Year 2 Total | Prior Year 1 Total | Year-to-Date Total | Monthly Avg |
|---|---|---|---|---|
| Overtime | $ | $ | $ | $0.00 |
| Bonus | $ | $ | $ | $0.00 |
| Commission | $ | $ | $ | $0.00 |
| Months elapsed year-to-date: | ||||
Averaging rule
Monthly average = (Year 2 + Year 1 + YTD) ÷ (24 + YTD months). Requires a consistent 2-year history (12 months may be acceptable with strong compensating factors per AUS findings).Declining trend: if the current year is trending lower than prior years, use the lower recent figure — do not average up. If income declined significantly, document stability before including it.
Section 2 Monthly Variable Income$0.00
Section 3 — Self-Employed Income Schedule C — cash flow analysis (Fannie Mae Form 1084 method)
How to add back allowable depreciation from tax returns
Depreciation is a paper loss — it reduces taxable income but is not an actual cash expense, so it is added back to the borrower's qualifying income. Locate and add back each of the following:- Schedule C, Line 13 — Depreciation & Section 179 expense: add back the full amount. Cross-reference Form 4562 (Depreciation and Amortization) to confirm the figure and identify any one-time Section 179 elections.
- Vehicle depreciation from the standard mileage deduction: if the borrower deducted vehicle expenses using the standard mileage rate (Schedule C, Part IV or Form 4562, Part V), multiply business miles × the IRS depreciation portion of the mileage rate for that tax year (2023: $0.28/mi · 2024: $0.30/mi · 2025: $0.33/mi) and add it back. Do not add this if actual vehicle expenses were deducted — that depreciation is already on Line 13.
- Business use of home depreciation (Form 8829, Line 42): if Form 8829 was filed, the depreciation portion of the home-office deduction may be added back. Many lenders add back the entire Schedule C Line 30 amount; follow your investor guideline.
- Depletion (Schedule C, Line 12) and amortization/casualty losses (Part V, Line 27a/48) are treated the same way — non-cash, added back.
For partnerships and S-corps, add back depreciation from Form 1065 Line 16c / Form 1120-S Line 14 in proportion to the borrower's ownership percentage, using Schedule K-1 and the 1084 business cash flow section. Subtract non-deductible meals (Line 24b exclusion) and any nonrecurring income.
| Cash Flow Item (Schedule C reference) | Prior Year 2 | Prior Year 1 |
|---|---|---|
| Net profit or (loss) — Line 31 | $ | $ |
| (−) Nonrecurring other income — Line 6 | $ | $ |
| (+) Depletion — Line 12 | $ | $ |
| (+) Depreciation & Sec. 179 — Line 13 | $ | $ |
| (−) Non-deductible meals exclusion — Line 24b | $ | $ |
| (+) Business use of home — Line 30 | $ | $ |
| (+) Amortization / casualty loss — Part V | $ | $ |
|
(+) Vehicle depreciation add-back: business miles × rate Miles: / Rate ($/mi): / |
$0.00 | $0.00 |
| Adjusted annual cash flow | $0.00 | $0.00 |
24-month average = (Year 2 + Year 1) ÷ 24. If the most recent year declined, use the lower year ÷ 12 and document income stability. Minimum 2-year self-employment history (1 year may qualify per DU/LP findings with 5+ years prior related experience).
Section 3 Monthly Self-Employed Income$0.00
Section 4 — Other Income Rental, retirement, support — monthly amounts
| Source | Documentation | Monthly Amount |
|---|---|---|
| $ | ||
| $ | ||
| $ |
Nontaxable income (e.g., Social Security, child support) may be grossed up per program guidelines — conventional 25%, FHA 15%. Enter the grossed-up figure and note it in Documentation.
Section 4 Monthly Other Income$0.00
Total Monthly Qualifying Income
| Section 1 — W-2 Base | $0.00 |
| Section 2 — Overtime / Bonus / Commission | $0.00 |
| Section 3 — Self-Employed | $0.00 |
| Section 4 — Other | $0.00 |
| TOTAL MONTHLY QUALIFYING INCOME | $0.00 |