If you are one of the many people in the country that rely on tips as your main source of income then you will definitely have some issues when applying for a loan. While it may seem very difficult or near impossible there will be some helpful information that will end up clearing a much easier path for you to get you into your next vehicle or mobile for the very first time.
One thing that seems to be great about having a tip income is the fact that you will be able to not report that income on tax returns, which is going to save you a lot of money. This will however create a huge issue when applying for bad credit financing to buy a used car. Here are a few things though that the IRS wants you to know about tip income that may be helpful.
With all this being said, it may be an uphill battle still because while a lot of lenders do not verify income since this is a high risk loan it is very likely that they will do so. If you have no record of this being recorded on a W2 or professionally prepared tax return then essentially there is no proof in the eyes of the lenders. Even bank records do not typically help out in this situation.
If you have applied for a damaged credit auto loan and have not had any luck so far, then let Funding Way help you out. We have years of experience in helping those who have not been able to get an auto loan elsewhere to be able to receive one here through local dealerships. So no matter what your method may end up being you will definitely have one here!
Problems with Tip Income and Auto Loans
One thing that seems to be great about having a tip income is the fact that you will be able to not report that income on tax returns, which is going to save you a lot of money. This will however create a huge issue when applying for bad credit financing to buy a used car. Here are a few things though that the IRS wants you to know about tip income that may be helpful.
- Tips are taxable and are subject to federal income, Social Security, and Medicare.
- Include tips on your tax return; this will include all types of tips as well.
- Report your received tips to your employer; your employer is required to withhold federal income, Social Security, and Medicare taxes from them.
- Keep a running log on your tips received.
With all this being said, it may be an uphill battle still because while a lot of lenders do not verify income since this is a high risk loan it is very likely that they will do so. If you have no record of this being recorded on a W2 or professionally prepared tax return then essentially there is no proof in the eyes of the lenders. Even bank records do not typically help out in this situation.
Income Conditions and Other Ways to Help
Now if you apply for a loan then you need to make sure that you do have the proof as stated above. Most non prime auto lenders will have set minimum requirements for an income and if you can not prove that then flat out you will not be approved. It can be a rough thing to deal with, but is easily possible to work around through methods as stated previously.If you have applied for a damaged credit auto loan and have not had any luck so far, then let Funding Way help you out. We have years of experience in helping those who have not been able to get an auto loan elsewhere to be able to receive one here through local dealerships. So no matter what your method may end up being you will definitely have one here!