It’s tax season, so if you’re considering buying a home at this time listen up. Should you file your taxes before buying a home this year? The answer is it depends. It’s best to consult with a loan officer first because if your income for the current tax filing year actually dropped, then filing your taxes first before buying a home may negatively impact your home purchase loan by reducing your buying power. This is especially true if you are a 1099 or self-employed where your income can fluctuate a lot from year to year and also based on how much expenses you wrote off.
So if you are thinking of buying a home very soon, it’s best to discuss with a loan officer to see which option is best for you, to file immediately or hold off and buy that house first and then file your taxes. If you’re better off holding off on filing and it takes you longer than the tax filing deadline to close on a home. Then in this situation, it is recommended that you go ahead and file an extension for taxes. This will allow you an additional 6 months to file your taxes at a later date and work on buying that home first!
Full disclosure I am not an accountant or loan officer, consult with your tax and lending professionals before following my advice. Any other questions, please leave them in the comments and I’ll get back to you!
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