If you are a commissioned or self employed person, the income is a little trickier to qualify. You need to have at least 2 years of history and the amount used is after most deductions. Depreciation and one-time deductions can be added back in. Standard deductions stay in but if you itemize more than that it lowers your income.
This is how many self employed workers get into trouble when trying to qualify. If your writing everything off and only paying taxes on 10K or 20K a year, that is close to the income that will be used. If you are self employed and want to buy a house, you need to be keep this in mind.
We always ask for 2 years in tax returns before pre-qualifying any self employed or commissioned employees so we don't run into problems once the sales contract comes in. If you are a salaried or hourly employee that doesn't file a long return, we only ask for w2's and paystubs until we get a sales contract then we get the rest of the documents.