Self-Employed Income Calculator Guide

It estimates the qualifying income a lender will use from your tax returns by averaging net business income and adding back non-cash deductions like depreciation.

The Complete Guide

Self-employed borrowers qualify on net income, not gross revenue, and the gap between the two is where many applications stumble. Understanding how lenders read your returns is the key to a smooth approval.

The good news is the add-backs. Depreciation and other non-cash deductions are added back to your net income because they did not actually drain your bank account, which can meaningfully raise your qualifying figure above your taxable income.

Consistency wins. Lenders average two years and prefer stable or growing income, so a big deduction-heavy year right before applying can hurt. If your tax returns understate your cash flow, a bank-statement loan may qualify you for more.

How the Calculator Works

The calculator averages your net income across the documented years, adds back deductions that did not cost cash — depreciation, depletion, and similar — and applies your ownership share to produce a monthly qualifying figure.