What are Proof of Income Documents?

Part of being an adult is understanding the importance of Proof of income documents. These are papers that summarize your activity and financial history and are required in case of renting or purchasing certain goods and also for the application of certain financial products.

It is therefore essential that you take care of your financial relationship with banks. It is also important that you fulfill all your tax responsibilities and keep all your paychecks.

How can I get Proof of income?

Obtaining this set of papers (or paper) is simple, but the amount and format will depend directly on the reason you need them. So if you are looking at several properties or require a specific financial product, you will notice that the Proof of income requested will change.

If you are an employee, you will need to ask your employer for a document that reflects your income. There are also tax forms, such as Form 1040 and 1099 Forms.

Both allow you to prove that you have the economic conditions required to make a credit or rent payment.

On the other hand, if you are self-employed, the situation can get a little more complicated, since you have to prove that you receive the necessary monthly income to pay. In this case, a bank statement is an excellent option. The pay stub is also a Proof of income document that you should use. In this case, its format must include:

• Gross pay
• Deductions
• Net pay

Do I need proof of income documents for renting?

If you are renting a property, either as a landlord or a property owner, proof of income documents are a set of papers that allow you to demonstrate and support the financial history of those who will be renting a property.

In most cases, the owners of a house or apartment have them as a requirement. This is because it will assure them that the person who is going to rent will take care of their home and will comply with the payment and conditions that were agreed upon.

It is for all these reasons that these papers have an elementary role in the furniture world since they will determine whether the rental is finalized or not. Some of the most requested proof of income documents by landlords are:

• Pay stub
• Employer letter
• Bank statements
• Self-employed Pay Stub

Some landlords do not ask for proof of income documents, but this is very difficult to get. However, there are certain real estate agencies that can help you if you are one of those who do not want to get these documents or simply do not have good income, you just have to search very well to get them.

4 Proof of income documents that you must have on hand

Proof of income can be requested by banks as well as landlords, so they should not be missing from your most basic documents. These are as important as your ID if you want to buy a car, rent a house, or apply for a loan, so if you have any of the following, keep them and take care of them as you would with your official ID.

Proof of income letter

Also known as an Income Verification Letter and Letter of employment, it is a piece of paper that compiles information regarding an employee’s salary. It can be written by the employer or a social security caseworker and must specify the following information:

• Position
• Date of employment
• Contact information

It must contain some legal seal or signature that allows verifying the veracity of the information it contains. You can also write it yourself, but, in the same way, it must be verified by the company where you work. In these cases, on different web pages, you will find a format that will help you to do it.

Form 1040

This is a federal tax form of the Internal Revenue Service (IRS) that is filled out with all the information regarding the annual income and expenses that an individual, within the territory of the U.S., must present. It consists of two pages and the data that must be added are:

• Tax and credits
• Payments
• Income
• Refund

Basically, the U.S. Individual Tax Return is the document where taxpayers detail all the financial movements they made in a year and this will determine if any refund should be made. This form can be obtained here and there are several websites that will help you fill it out properly.

Pay stub

This is a receipt where the information regarding the employee’s salary is detailed, so it must contain the gross income and the deductions that the company makes. It also includes the net income and tax withholdings, so it is an excellent reference in case of applying for a loan or for a landlord. This format also usually includes:

• Pay period
• General information
• Involuntary deductions
• Voluntary deductions

The design can change, but basically, it must contain all deductions and earnings that an employee gets for his work, that’s why it is also known as a paycheck and, in some cases, it is called a payslip.

If you are self-employed, you can generate your own pay stub. In it, you should include what you receive for your services, as well as the tax deductions that you can calculate yourself thanks to the different tools available on the Internet.

You should also include the total net amount you end up receiving. In these cases, the information must be accurate, as there is no company or corporation that can back it up.

Bank Statement

Another excellent option for the self-employed is bank statements. This is a summary of all those financial transactions you have made in a bank account (now do you understand how important it is to take care of your financial history?). This includes data such as:

• Withdrawals
• Interest
• Month-end closing amount
• Deposits
• Charges

Those who are self-employed can also use this format as a proof of income document, as it will reflect the income and expenses chronologically in the account of their choice.

What is an alternative to proof of income?

Many of those who require this type of information formally and explicitly request the pay stub, but there are also some alternatives that will serve to replace it. In these cases, you must explain honestly why you cannot provide it.

How can I provide proof of income for apartment application ?
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You can also ask directly what other documents the person or organization accepts that can substitute for the paycheck function.

They will probably mention some of the papers I have already mentioned in this text. You may also be asked to provide a letter of recommendation from an employer or client, as well as tax statements or an accountant letter.

References

• Barone, Adam. “What Is a Bank Statement: Definition, Benefits, and Requirements.” Investopedia, Investopedia, https://www.investopedia.com/terms/b/bank-statement.asp
• “Chapter 05: What Is Proof of Income? – MintLife Blog.” MintLife Blog, https://mint.intuit.com/blog/housing/proof-of-income-1204/
• “FORM m 1040.” IRS GOV, https://www.irs.gov/pub/irs-pdf/f1040.pdf
• Leonard, Kimberlee. “What Is A Pay Stub & What Should It Include? – Forbes Advisor.” Forbes Advisor, Forbes, https://www.forbes.com/advisor/business/what-is-pay-stub/
• Lerner, Ben. “How to Show Proof of Income: A Guide for the Self-Employed.” One Platform for Your Business Finances, https://lili.co/blog/proof-of-income-self-employed
• Masters, Wesley. “What Is Proof of Income? Plus, Examples of How to Show What You Make | ApartmentGuide.Com.” Apartment Living Tips – Apartment Tips from ApartmentGuide.Com, https://www.apartmentguide.com/blog/what-is-proof-of-income/
• “Proof-of-Income-Letter.” INDEED, https://www.indeed.com/career-advice/pay-salary/proof-of-income-letter
• “Proof-of-Income-Letters/.” DOCFORMATS, https://www.docformats.com/proof-of-income-letters/