Self-employed, or paid overtime, bonus or commission?

Usually from your last two years of tax returns, using your net income after business expenses, averaged over 24 months. Some expenses that aren't cash, such as depreciation, may be added back. If your income fell, they usually use the lower, more recent year.

Often yes, if you have about two years of history and it is likely to continue. It is usually averaged. If it has been falling, lenders tend to use the lower recent amount.

Some loans accept shorter history in the same line of work, and bank statement loans use deposits instead of tax returns. Ask us what fits your situation.