January 29th, 2014 10:28 AM by David K. Harrington
For W2 employees, this area of the Federal Tax Returns, more commonly known at "1040's - Schedule A Line 21-with form 2106 Attached," can be a deal killer when qualifying for a home mortgage.Sure, everyone likes to pay less to Uncle Sam, but there ARE consequences. Mortgage guidelines require 2106 Expenses be deducted "dollar for dollar" against your base income. Let's say you make $75,000 per year. Should you have 2106 expenses of $10,000, your NEW adjusted income to qualify for a mortgage is now $65,000. Sure, you can save some money NOW, but you could limit your future purchase options or eliminate your ability to refinance your current mortgage. If you have any questions, calling BEFORE you FILE your 2013 Taxes would be better than AFTER. Don't let your current goal (pay less taxes) stop your future goal (home ownership/refinance).