Top 5 Proof of Income Examples: The consensus when renting is that a potential tenant should have an income that sits at 3:1 with the rental cost of the property. If an apartment is $1,700 per month they should be earning at least $5,100.
Landlords want to make sure potential tenants can pay rent on time. By providing any of these proof of income examples listed below you can assure a potential landlord of your financial health.
This documentation also serves as one of the documents needed to confirm identity.
1. Pay Stubs
This documentation is the most common and easiest to obtain among the various proof of income examples. Regardless of full or part-time status, you receive a pay stub each pay cycle when you get your check.
Many businesses have gone to a paperless system and you may have to either request a paystub from your employer or go online to an employee portal to print out a paper copy.
There are also software resources that will allow you to create paper check stub templates when you require a physical copy.
2. Tax Returns
As a governmental document, your tax returns are a very reliable document to use for proof of income. The paperwork will provide a detailed view of the yearly income, although it is not week to week like a paystub.
This is especially helpful for independent contractors and freelancers who may not always be receiving the standard weekly paycheck.
It is important that you have filed W-2 forms for all employers or you will not be able to provide an accurate and complete record of your income for those requiring it.
3. Bank Statements
A detailed statement from your bank can provide a record of income as well as many other business interactions. A bank statement will show all incoming and outgoing transactions.
The risk when providing a bank statement however is the chance that transactions may be misidentified.
4. Letter From Employer
As it sounds this is a correspondence from a current employer confirming employment and the level of income that has been mentioned.
This is also an opportunity to provide a strong reference to a landlord or other individual requesting proof of income.
5. Social Security Documents
These only apply to those individuals that live on social security payments from the government. They are applicable forms of income and the documents recording the payments you receive are valid proof of income.
What About Self-Employed Individuals?
People in this category have to collect a different set of documents. Although with good bookkeeping the process isn’t any harder.
The most common documents providing proof of income for self-employed individuals include:
- 1099 form from the IRS
- Profit and Loss Statement or Ledger Documents
- Bank Statements
1099 is an official wage and tax statement and most reliable proof of income for the self-employed.
A ledger document is a summary of costs and expenses throughout the year. By keeping track of cash flow in this manner you can provide a record of your income. Use this to both identify business concerns and provide needed financial information
Bank statements are very helpful as proof of income as they show all interactions in regards to income and work expense. To keep an accurate account of your cash flow it is wise to keep a second account for business so there is no confusion.
Prove Your Worth With Proof of Income Examples
As you can see there are many options for both standard employees and self-employed when the time comes and you need to show that you indeed are making the money you claim you are making.
Money makes the world go round and people need to be sure they will get what they require. Now you know how to make the process as easy as possible.
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