Formula for Calculating Profit

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Formula for Calculating Profit Powered By Docstoc
					Federal Home Loan Bank of Seattle
2009 Home$tart Program Annual Income Calculation Worksheet


Homebuyer Name:
*Date of Qualification:
*Please note that the date of qualification must be later than the pay date on the most recent pay stub, but cannot be more than 30 days later than the pay date.
Please provide the names of any household members over 18 listed on the Enrollment and Certification Form who receive no income (e.g., homemaker): __________________________________



Required Documents Consistent Income - Regular Wages or Salary                                                     Homebuyer - Job #1                                                                       Annual Income
TWO current               Step 1 - Determine the total number of pay periods per year
consecutive pay           First, on a calendar, circle the pay dates listed on each of the two consecutive pay       Gross Pay -        Gross Pay -            Average Pay            Total # of
stubs showing gross       stubs. Please note that the "pay date" may be different than the "pay period end           Pay Stub #1        Pay Stub #2             Per Period               Pay
earnings for the pay      date."                                                                                                                                                       Periods
period
                                                                                                                                                                                      Per Year
                          Second, looking at the circled dates on the calendar, determine if the pay schedule is
                          every other week, twice a month, weekly or monthly.

                          Pay period examples:                                                                                     +                     /2= $         -         x                   =      $           -
                          Every other week - 26 pay periods per year
                          Twice a month - 24 pay periods per year
                          Weekly - 52 pay periods per year                                                         Homebuyer - Job #2                                                                       Annual Income
                          Monthly - 12 pay periods per year

                          Step 2 - Enter the gross pay listed on each of the two consecutive pay stubs               Gross Pay -        Gross Pay -            Average Pay            Total # of
                          In the formula boxes on the right, enter the gross pay amounts from two current            Pay Stub #1        Pay Stub #2             Per Period               Pay
                          consecutive pay stubs under "Gross Pay - Pay Stub #1 and Gross Pay - Pay Stub                                                                                Periods
                          #2." The formula will determine the average pay amount per pay period. Please                                                                               Per Year
                          subtract any bonus or profit sharing amounts earned within either pay period before
                          entering the gross pay amounts and calculate bonus/profit sharing income separately
                          on page four of this worksheet. (Note: If calculating by hand, add the gross amounts
                          from each pay stub and divide the sum by 2.)                                                             +                     /2= $         -         x                   =      $           -

                          Step 3 - Determine annual income
                          In the formula boxes on the right, enter the appropriate number of pay periods           Co-buyer or other household member over 18 years of age                                  Annual Income
                          recevied annually as determined in Step 1 under "Total # of Pay Periods Per Year."
                          The formula will multiply the average pay per period by the total number of pay
                          periods in one year to calculate projected annual income. (Note: If calculating by         Gross Pay -        Gross Pay -            Average Pay            Total # of
                          hand, multiply the "Average Pay Per Period" by the "Total # of Pay Periods Per             Pay Stub #1        Pay Stub #2             Per Period               Pay
                          Year.")                                                                                                                                                      Periods
                                                                                                                                                                                      Per Year
                          Annual income example using an every other week pay schedule:
                          ($1,288 + $1,304) / 2 = $1,296.00 x 26 pay periods per year = $33,696 annual
                          income                                                                                                   +                     /2= $         -         x                   =      $           -




                                                                                                                                                                           2009 Home$tart Annual Income Calculation Worksheet
                                                                                                                                                                                                      Effective January 1, 2010
Federal Home Loan Bank of Seattle                                                                                                                                                                              REV 11/09 1 of 5
Required Documents Inconsistent Income (Tips, commissions, on-call, or seasonal employment)                      Homebuyer                                                                                   Annual Income
TWO current          Step 1 - Determine the total number of pay periods per year
consecutive pay      First, on a calendar, circle the pay dates listed on each of the two consecutive pay           Gross Pay -          Gross Pay -            Average Pay             Total # of
stubs showing gross stubs. Please note that the "pay date" may be different than the "pay period end                Pay Stub #1          Pay Stub #2             Per Period                Pay
earnings for the pay date."                                                                                                                                                              Periods
period
                     Second, looking at the circled dates on the calendar, determine if the pay schedule                                                                                Per Year
AND                  is every other week, twice a month, weekly or monthly.

Prior year's W-2s or      Pay period examples:                                                                                      +                     / 2 =$        -         x
a signed tax return.      Every other week - 26 pay periods per year
Tax returns will only     Twice a month - 24 pay periods per year
                          Weekly - 52 pay periods per year                                                                               Current Year
be accepted for
individuals who did       Monthly - 12 pay periods per year                                                                                Annual               Prior Year
not file a joint return                                                                                                                    Income              Total Income
                     Step 2 - Enter the gross pay listed on each of the two consecutive pay stubs
AND                  In the formula boxes on the right, enter the gross pay amounts from two current
                     consecutive pay stubs under "Gross Pay - Pay Stub #1 and Gross Pay - Pay Stub                                 =     $         -     +                         /2     =                  $           -
Written confirmation #2." The formula will determine the average pay amount per pay period. Please
of seasonal          subtract any bonus or profit sharing amounts earned within either pay period
employment, if       before entering the gross pay amounts and calculate bonus/profit sharing income
                     separately on page four of this worksheet. (Note: If calculating by hand, add the              Start Date*:
applicable
                     gross amounts from each pay stub and divide the sum by 2.)                                    *Please enter start date with current employer
                          Step 3 - Determine current year income
                          In the formula boxes on the right, enter the appropriate number of pay periods
                          recevied annually as determined in Step 1 under "Total # of Pay Periods Per            Co-buyer or other household member over 18 years of age                                     Annual Income
                          Year." The formula will multiply the average pay per period by the total number of
                          pay periods in one year to calculate projected annual income. (Note: If calculating
                          by hand, multiply the "Average Pay Per Period" by the "Total # of Pay Periods Per         Gross Pay -          Gross Pay -            Average Pay             Total # of
                          Year.")                                                                                   Pay Stub #1          Pay Stub #2             Per Period                Pay
                                                                                                                                                                                         Periods
                          Step 4 - Determine projected annual income                                                                                                                    Per Year
                          If using more than one W-2, add all the wages from each of the W-2s. Always
                          choose the largest wage amount listed on each W-2. In the formula box on the
                          right, enter the sum of the wages under "Prior Year Total Income."                                        +                     / 2 =$        -         x

                          If using a signed tax return, enter the wages listed on page one, Line 7, of the tax
                          return in the "Prior Year Total Income" formula box on the right.                                              Current Year
                                                                                                                                           Annual               Prior Year
                          If bonus or profit sharing income was received within the previous year, please                                  Income              Total Income
                          subtract these amounts before entering total gross wages under "Prior Year Total
                          Income" and calculate bonus/profit sharing income separately on page four of this
                          worksheet.
                                                                                                                                   =     $         -     +                        /2      =                  $           -
                          The formula will average the current year's annual income and the prior year's
                          income to derive total projected income. (Note: If caluclating by hand, add the
                          "Current Year Annual Income" to "Prior Year Total Income" and divide by 2.)

                          Annual income example using an every other week pay schedule:                             Start Date*:
                          ($1,288 + $1,304) / 2 = $1,296.00 x 26 pay periods per year = $33,696 current            *Please enter start date with current employer
                          year income

                          ($33,696.00 current year income + $25,675 prior year income) / 2 = $29,685.50
                          projected annual income




                                                                                                                                                                            2009 Home$tart Annual Income Calculation Worksheet
                                                                                                                                                                                                       Effective January 1, 2010
Federal Home Loan Bank of Seattle                                                                                                                                                                               REV 11/09 2 of 5
Required Documents Self-Employment Income                                                                          Homebuyer, co-buyer or other household member over 18 years of age                                Annual Income
Current quarterly         Step 1 - Enter current year net income
profit/loss               In the formula boxes on the right, enter the current year's net earnings as shown on       Current Year          Prior Year                   Total Net                 Total
statement                 the most recent quarterly profit/loss statement under "Current Year Net Income."           Net Income            Net Income                    Income                 Number of
                                                                                                                                                                                                 Months
AND                       Step 2 - Enter prior year net income
                          In the formula boxes on the right, enter the amount shown on page one, line 12, of
Prior year's              the prior year's tax return under "Prior Year Net Income." The formula will add
signed tax return         current year net income to business income from the prior year. (Note: If calculating                      +                              $           -           /                 =
                          by hand, add the current year net income from the profit/loss statement to the
                          amount on line 12 of the previous year's tax return.)
                                                                                                                                               Average
                          Step 3 - Enter total number of months worked                                                                         Monthly
                          Determine the number of months the homebuyer has worked during the current year                                      Earnings
                          and add this to the number of months worked in the previous year. Enter this result in                           $         -          x          12           =                            $           -
                          the formula boxes on the right under "Total Number of Months."

                          Step 4 - Calculate average monthly earnings
                          The formula will calculate "Average Monthly Earnings." (Note: If calculating by hand,       Start Date*:
                          divide the "Total Net Income" calculated in Step 2 above by the "Total Number of
                                                                                                                     *Please enter self-employment start date
                          Months.")

                          Step 5 - Determine annual income
                          The formula will calculate an annual income amount. (Note: If calculating by hand,
                          multiply the "Average Monthly Earnings" by 12 to derive projected annual income.)

                          Example:
                          Net Earnings as of September 30 profit/loss statement = $22,000
                          Business income as reported on line 12 of previous year's tax return = $35,000
                          Total number of months = 21 (i.e., 9 months from current year + 12 months from
                          prior year)
                          $22,000 + $35,000 = $57,000
                          $57,000 / 21 = $2,714.29 average monthly earnings
                          $2,714.29 x 12 = $32,571.43 annual projected income




                                                                                                                                                                                    2009 Home$tart Annual Income Calculation Worksheet
                                                                                                                                                                                                               Effective January 1, 2010
Federal Home Loan Bank of Seattle                                                                                                                                                                                       REV 11/09 3 of 5
Required Documents Bonus or Profit Sharing Income                                                                  Homebuyer, co-buyer or other household member over 18 years of age                            Annual Income
Signed VOE                Step 1 - Enter current year bonus/profit sharing income received
showing                   In the formula boxes on the right under "Current Year Bonus/Profit Sharing," enter         Current Year           Prior Year               Total                    Total
employment start          the amount of bonus/profit sharing income received in the current year as shown            Bonus/Profit          Bonus/Profit           Bonus/Profit              Number of
date and current          under the YTD earnings on the most recent pay stub.                                          Sharing               Sharing                Sharing                  Months
and prior year
bonus/profit              Step 2 - Enter prior year bonus/profit sharing income received
sharing totals            In the formula boxes on the right under "Prior Year Bonus/Profit Sharing," enter the
                          amount of bonus/profit sharing income received in the prior year as shown on the                            +                           $         -           /                 =
                          VOE. The formula will add current year bonus/profit sharing income to bonus/profit
                          sharing income from the prior year. (Note: If calculating by hand, add the current
                                                                                                                                             Average
                          year bonus/profit sharing income to that received in the prior year.)
                                                                                                                                             Monthly
                          Step 3 - Enter total number of months worked                                                                     Bonus/Profit
                          Determine the number of months the homebuyer has worked for his/her current                                        Sharing
                          employer during the current year and add this to the number of months worked in the
                                                                                                                                           $         -        x        12           =                            $           -
                          previous year. Enter this result in the formula boxes on the right under "Total Number
                          of Months."

                          Step 4 - Calculate average monthly bonus/profit sharing earnings
                          The formula will calculate "Average Monthly Bonus/Profit Sharing." (Note: If
                                                                                                                      Start Date*:
                          calculating by hand, divide the "Total Bonus/Profit Sharing" calculated in Step 2
                          above by the "Total Number of Months.")                                                    *Please enter start date with current employer

                          Step 5 - Determine annual bonus/profit sharing income
                          The formula will calculate an annual income amount. (Note: If calculating by hand,
                          multiply the "Average Monthly Bonus/Profit Sharing" by 12 to derive projected annual
                          bonus/profit sharing income.)

                          Example:
                          Homebuyer has been with current employer since 2005
                          Most current pay stub dated July 1
                          Current year bonus received as reported under YTD earnings on most recent pay
                          stub = $1,000
                          Prior year bonus received as reported on VOE = $2,000
                          Total number of months = 18 (i.e., 6 months from current year + 12 months from
                          prior year)
                          $1,000 + $2,000 = $3,000
                          $3,000 / 18 = $166.67 average monthly bonus/profit sharing
                          $166.67 x 12 = $2,000 annual projected income




                                                                                                                                                                                2009 Home$tart Annual Income Calculation Worksheet
                                                                                                                                                                                                           Effective January 1, 2010
Federal Home Loan Bank of Seattle                                                                                                                                                                                   REV 11/09 4 of 5
Required Documents Other Income (Retirement, social security, and veterans' benefits, Alaska PFD)              Homebuyer, co-buyer or other household member over 18 years of age                         Annual Income
Benefit letters,           In the far right column under "Annual Income", enter the total annual income        Please show calculation of annual "Other Income" amount
current monthly            amount.
bank
statements,
deposit history,
etc.



Required Documents Disability Benefits                                                                         Homebuyer, co-buyer or other household member over 18 years of age                         Annual Income

Current                    In the far right column under "Annual Income", enter the total annual income        Please show calculation of annual "Disability Benefit" amount
disability benefit         amount.
statements




Required Documents Alimony or Child Support (Please use court ordered amount)                                  Homebuyer, co-buyer or other household member over 18 years of age                         Annual Income
Court order or             In the far right column under "Annual Income", enter the total annual income        Please show calculation of annual "Alimony or Child Support" amount
current                    amount.
statement of
deposit




                                                                                          If calculating by hand, add the numbers in the annual income column to calculate total annual income.
                                                                                                                                                                        Total Annual Income               $           -




                                                                                                                                                                         2009 Home$tart Annual Income Calculation Worksheet
                                                                                                                                                                                                    Effective January 1, 2010
Federal Home Loan Bank of Seattle                                                                                                                                                                            REV 11/09 5 of 5

				
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