Congratulations! If we’ve asked you to submit documents, that means you’ve been prequalified.  Here, we’ll show you what documents you need to submit and where you can find them. 

Tax Return (Form 1040)
Bank Statements
1099
Profit & Loss Statement

Q: Why do you need me to send additional documents? 

A: We want to make sure that at the end of the Landis program, you’ll get a mortgage and become a homeowner! These same documents will also be required by a  mortgage lender when you apply for a loan. While Landis isn’t a mortgage lender, we want to review these documents to ensure that you have a clear path towards getting a mortgage at a budget that a lender would approve. 

Why does a mortgage lender need to see these documents? Well, they want to make sure that you have consistent income, aren’t living beyond your means, and that you can be expected to make the monthly mortgage payments. 

Q: That makes sense – so what documents do I need to send?

A: The short answer is, it depends! Your current employment situation will determine what documents are needed. For those who are self-employed, here’s what we need:

  • Most recent tax return (Form 1040)
  • Two most recent personal bank statements
  • Two most recent corporate bank account statements (if applicable)
  • Year-to-date Profit & Loss statement (if applicable)

For those who are contract employees, here’s what you’ll need:

  • Most recent tax return (Form 1040)
  • Two most recent personal bank statements
  • Most recent 1099
  • Year-to-date Profit & Loss statement (if you receive more than one 1099 per year)

Tax Return (Form 1040)

Q: What is a Form 1040?

A: The Form 1040 is used to file an annual income tax return. When sending this document to Landis, we need to see all of the pages included. Below is what the basic Form 1040 looks like (it will say Form 1040 in the top left corner on the first page). 

Keep in mind that if you’re reporting any additional income, including self-employment income, your Form 1040 will have several additional pages.

Q: What additional pages will it include if I’m self-employed?

A: As a self-employed person, the Form 1040 will include several additional forms (called Schedules), but the most important that we’ll want to see are the Schedule 1 and Schedule C.

Schedule 1 is used to report types of income that aren’t listed on the 1040, such as capital gains, alimony, unemployment, and business income. A Schedule C is used to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if:

  • Your primary purpose for engaging in the activity is for income or profit.
  • You are involved in the activity with continuity and regularity.

Q: When do I file this document?

A: Your tax returns are usually due on April 15. In 2020, due to the ongoing pandemic and recent tax law modifications, the deadline to file federal tax returns was extended to May 17, 2021.

Q: Can you use my tax return that I filed last year?

A: You can use a previous return until the tax filing deadline. For instance, you’ll be able to provide your 2020 tax return up until April 15, 2022. After that, we’ll ask you for your 2021 tax return. 

Q: Where can I find a copy of my Form 1040?

A: If you filed your tax returns through a tax preparer, online tax service, or CPA, they can provide a printed or electronic copy of your Form 1040. 

If you still have trouble finding a copy, the IRS can help. The fastest way to get a Tax Return is through the ‘Get Transcript’ tool available on IRS.gov.  

Bank Statements

Q: What is a bank statement?

A: A bank statement is a document prepared by your financial institution each month. With a bank statement, you can see all of the income and spending activity related to the account. 

A typical bank statement is multiple pages and covers all transactions (deposits, purchases, transfers, etc.) that you made during that time period. 

Q: When do I get a bank statement?

A: Bank statements are issued once per month. Check with your bank to see what their statement schedule is. 

Q: Where can I find a copy of my bank statement?

A: Most banks allow you to choose how you want to receive your bank statements. You can receive a paper statement in the mail, or you can have an electronic bank statement posted to your account. Usually, it’s possible to save your statement as a PDF on your computer or print it out. We recommend reaching out to your bank to request these statements if you don’t have them on hand.

Q: Can I just screenshot my current bank balance?

A: We won’t be able to accept a screenshot of your current bank balance. When reviewing bank statements, we need to be able to see the transactions you make and the deposits made into the account. As such, we need the full bank statement.

Q: What if I don’t have a separate bank account for my business?

A: That’s alright! We’ll just need to see your business income recorded in your personal bank statements if that’s the case. 

Q: What if I don’t have a bank account?

A: It is not possible to qualify for a mortgage without having a bank account. Without one, a lender can’t verify where your income is going or what you’re spending it on each month. We recommend setting up a bank account if you don’t already have one in your name – this will be crucial on your path towards homeownership. 

If you need assistance setting up a bank account, we recommend you check out this article: https://www.nerdwallet.com/article/banking/how-to-open-a-bank-account-what-you-need.

1099

Q: What is a 1099?

A: 1099 forms are federal income tax information forms from businesses and other institutions to document certain financial transactions conducted during a tax year. 1099-NEC’s are used to report earnings and proceeds from work performed as an independent contractor. Here’s an example 1099:

Q: Who gets a 1099?

A: The 1099-NEC (non-employee compensation) is the most common version of the 1099, sent to freelancers who are not employees of the business. If you are paid more than $600 during the year and aren’t considered an employee, you’ll receive a 1099-NEC directly from the business. 

Q: I thought it was just a 1099. What’s a 1099-NEC?

A: There are many variations of the 1099 form for income received from different sources! The most common ones are the 1099-NEC (non-employment compensation), 1099-R (retirement, pension, and annuity earnings), and the 1099-G (unemployment benefits). If you have a 1099-NEC or 1099-R, please send them in for our team to review. 

Q: How is this different from a W-2?

A: Most employees of a business do not receive 1099 tax forms. They receive Form W-2 to report income. The W-2 reports all money paid to an employee as well as withholdings for taxes. 1099 forms are used to report payments to freelancers and other independent contractors and generally don’t include withholdings.

Q: When do I receive a 1099?

A: The employer is required to send your 1099 to you by January 31 each year. 

Q: Where do I find my 1099?

A: If you don’t have a copy of your 1099, reach out to the employer to have them send you a copy. 

Profit & Loss Statement

Q: What is a Profit & Loss statement?

A: The profit and loss (P&L) statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year. The P&L statement is synonymous with the income statement. They come in various shapes and sizes, but here’s a sample of what it might include:

Q: Why do you need to see my Profit & Loss statement?

A: Without the pay stubs that salaried employees receive, we use the P&L statement as a way to assess your earnings for the current year. A mortgage lender will look at your net income to determine your mortgage eligibility – we get a better understanding of your net income by seeing this P&L statement. 

Q:  Don’t you see my Profit & Loss statement in my tax return?

A: Yes! On your taxes, what we see is your Profit & Loss statement from last year. We need to see a year-to-date statement for the current year as well to get an up-to-date pulse check on the health of your business and a gauge of your current income. 

Q: How can I find or create a Profit & Loss statement?

A: The P&L statement shows the following equation: Revenue – Expenses = Net Income. If you use accounting software like Quickbooks, there are easy ways to export a P&L statement directly from your computer. 

If not, then it’s pretty easy to create a Profit & Loss statement! We recommend you check out this article on how to create a Profit & Loss statement. You’ll learn what to include, why, and even have access to some template statements! 

Q: I’m a food delivery driver / car-hailing service driver. What documents will I need?

A: If you work for a food delivery or car-hailing company, you’re more likely than not designated as an independent contractor. You’ll need to provide Landis with a 1099 if you earn more than $600/year and a Year-to-Date Profit & Loss statement detailing your expenses.