Using a W2 That Shows More Income Than You Were Paid to Get a Loan
Quick question, Is there any issue with turning in a W2 form that shows a larger income than I was actually paid? I would file /pay all taxes on the larger amount to the IRS. This would be for purposes of a loan.....is there any problem as long as the taxes are paid? Any info would be greatly appreciated.
Thanks
Re: Claming Higher Income on W2 Than I Actually Made, Will Pay IRS for Larger Amount
It would be fraud against the lender. That could be big trouble.
Besides, where would you get a phony W2 like that?
Your employer would have to be complicit in the fraud.
Or would you just make up a phony W2 yourself?
Still probably a federal crime even if you pay the tax.
It's a stupid idea. Don't do it.
Re: Claming Higher Income on W2 Than I Actually Made, Will Pay IRS for Larger Amount
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bugles
Quick question, Is there any issue with turning in a W2 form that shows a larger income than I was actually paid? I would file /pay all taxes on the larger amount to the IRS. This would be for purposes of a loan.....is there any problem as long as the taxes are paid? Any info would be greatly appreciated.
Thanks
What you would be doing is committing fraud against the lender by lying about your income in order to get the loan. That’s a criminal act and would also allow the lender to rescind the loan contract — and that could mean loss of whatever was pledged as collateral for the loan. You are also technically committing perjury on the tax return. Note that you have a problem here in that the larger salary should also mean larger Social Security and Medicare taxes withheld and paid by the employer. If the employer has not done that, you would cause significant problems for the employer, too. If your employer is not a company that you own, this would likely end up with you getting fired.
Note that if you do not have sufficient income to qualify for the loan, that suggests you would have trouble paying that loan.
All the way around, this is a very bad idea.
Re: Claming Higher Income on W2 Than I Actually Made, Will Pay IRS for Larger Amount
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Taxing Matters
What you would be doing is committing fraud against the lender by lying about your income in order to get the loan. That’s a criminal act and would also allow the lender to rescind the loan contract — and that could mean loss of whatever was pledged as collateral for the loan. You are also technically committing perjury on the tax return. Note that you have a problem here in that the larger salary should also mean larger Social Security and Medicare taxes withheld and paid by the employer. If the employer has not done that, you would cause significant problems for the employer, too. If your employer is not a company that you own, this would likely end up with you getting fired.
Note that if you do not have sufficient income to qualify for the loan, that suggests you would have trouble paying that loan.
All the way around, this is a very bad idea.
This is a family business that we own so all taxes would be paid on personal as well as company end. I can afford paying the loan but the way our business is set up I dont show as much as I would need normally......
Re: Claming Higher Income on W2 Than I Actually Made, Will Pay IRS for Larger Amount
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bugles
This is a family business that we own so all taxes would be paid on personal as well as company end. I can afford paying the loan but the way our business is set up I dont show as much as I would need normally......
Then explain to the lender why it is that your income would support the loan. If the loan does go bad for any reason later and the lender discovers that you lied about your income in the application and submitted fraudulent documents to support the lie you may well end prosecuted for fraud. Anyone in the family business that aids you in that fraud would also be at risk for prosecution, too. I assume that the prospect of a conviction for fraud, fines, and possible jail/prison time is not a risk you want to take just to get a loan.
Re: Claming Higher Income on W2 Than I Actually Made, Will Pay IRS for Larger Amount
Just from a financial standpoint (ignoring the legality), it seems like there should be a better way without paying at least 15% (SS/Medicare) taxes plus any state/federal income taxes on whatever you want to add. That a steep price/upcharge to get a loan that it sounds like you can't afford based on your real earnings. Instead, why not take that money as a down payment to lower the loan amount needed? Do you get any other kind of income out of the family business other than wages? Maybe not is not the time to get a loan honestly or get a loan from the business itself if it has enough money to do so. Don't defraud someone else.