Thursday, November 13, 2008

Which Payroll Deductions Count As Liabilities?

Q: Do payroll deductions count as liabilities when calculating the debt-to-income (DTI) ratio?

A: If the deduction is used to pay a debt, such as child support, mandatory loan repayments, etc., then it must be counted as a liability. If the deduction is for payroll taxes, a contribution to a 401(K), union dues, etc., then it does not count as a liability.

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