Tax Season Warning: Your 2024 Tax Return Could Kill Your Mortgage Approval

If you're self-employed with a mortgage renewing in 2026 or planning to buy a home this year, you need to read this before your accountant files your taxes.

Here's the issue most people don't see coming:

Lenders use your last two years of Notice of Assessments to calculate your income for mortgage qualification. If your 2025 return shows significantly lower income than 2024, it could tank your approval or push you into expensive alternative lending.

We see this all the time:

• 2024 income: $95,000

• 2025 income: $65,000 (aggressive write-offs)

• Lender averages it: $80,000

• Client needed $85,000 to qualify

• Now they're stuck at 7.5% rates instead of 5.2%

Who this affects most:

✅ Self-employed clients who wrote off heavily in A specific year

✅ Business owners who took dividends instead of salary

✅ Anyone who had one strong year followed by a rebuilding year

✅ People who restructured or incorporated recently

The conversation you should have with your accountant:

"Before you file my 2025 return, I need to ask: do I have a mortgage renewing this year? Am I thinking about refinancing or buying property?"

If the answer is yes, call us BEFORE your accountant files.

What we can do together:

We'll tell your accountant exactly what income lenders need to see for your mortgage goals. Your accountant can then potentially adjust discretionary write-offs (within legal bounds) to set you up for approval.

This isn't about tax evasion. It's about strategic planning so you don't accidentally optimize for tax savings at the expense of mortgage qualification.

Real example:

Client came to us in March 2025. Their accountant had already filed showing $68,000 income. Previous year was $92,000. Lender averaged it to $80,000. They needed $88,000 to qualify for their refinance.

If we'd talked BEFORE filing, the accountant could have shown $84,000 income (still saving taxes, just not as aggressively), averaged to $88,000, and they'd have qualified at A-lender rates.

Instead? Alternative lender at 7.8%. Cost them an extra $18,000 over three years.

If you're planning to incorporate:

Stop. Talk to us first.

Incorporation is smart for liability and tax planning. But it changes everything for mortgage qualification. Some lenders want two years of corporate returns. Some want proof of retained earnings. Some won't lend to new corporations at all.

Before you incorporate, we'll tell you exactly how it'll impact your borrowing ability. Then your accountant can factor that into the timing.

What to do this week:

If you're self-employed and have mortgage plans in 2026, email your accountant: "Before you file my 2025 return, can we discuss how it might affect my mortgage qualification?"

Then loop us in. Quick call. We'll coordinate with your accountant to make sure you're set up for success on both fronts.

Our advice is free, and it could save you tens of thousands in unnecessary interest costs.