Tax returns are used in the lending process. So, having your tax return properly filled out and submitted to the IRS is important, if you plan to purchase a home or refinance in the next few years.
To learn more about how your tax return can affect the mortgage process, and how to avoid common mistakes, see How Are My Tax Returns Used in the Mortgage Lending Process?
In some cases a tax return will not be required for underwriting. However, the lender will require that you complete a form 4506T which is sent to the IRS to obtain a transcript of your filed return. So, even when a tax return is not initially requested, they are often requested after receipt of the transcript if any of the following items are noted: self employed or 1099 income, rental property income, unreimbursed business expenses or any items which don’t correspond with information submitted on paystubs or W-2s.