<prompt> Human: I have never understood why banks and credit unions use pretax income for judging if you can get a loan. I have to pay taxes, so I will never have that money more than likely. So why use the pretax? Just to justify a higher loan? Can someone explain why pretax income is ever used?  <response>: Probably because withholding can be wrong or easily misused. Your post-tax earnings might be much further from your actual earnings. 