Your annual federal income tax filing. Required by lenders for self-employed borrowers and often for W-2 borrowers with non-standard income (rental, dividends, K-1).
Your tax return is the annual filing you (or your accountant) submits to the IRS. For mortgage purposes, lenders care about the federal return — specifically Form 1040 and any attached schedules.
Self-employed borrowers always provide two years of personal tax returns and often two years of business returns (Schedule C, partnership 1065, S-corp 1120-S, or C-corp 1120). The lender uses the actual taxable income after deductions — not your business gross revenue — to qualify you.
W-2 borrowers may also be asked for tax returns if they have meaningful non-wage income: rental properties (Schedule E), investment income, partnership distributions, alimony, or significant unreimbursed business expenses. The IRS form 4506-C is what you'll sign authorizing the lender to verify your returns directly with the IRS.
Example
A self-employed graphic designer earned $180K gross in 2024 but had $60K in legitimate business deductions, netting $120K on Schedule C. The lender qualifies them based on $120K — not the $180K gross. Tax deductions reduce your qualifying income.
Also known as
1040, IRS tax return, personal tax return, federal tax return