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Formula for Calculating Profit document sample
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