As we go through life, we hit certain milestones at some point. You rent your first apartment, you buy your first car, and eventually, many Americans buy their first houses as well.
While some lucky people can afford these things outright, in the majority of cases, you’ll need to take out a loan. And to get approved for a loan, you need to prove that you’re trustworthy and can pay the amount back on time. Because of this, many lenders ask for proof of income.
If you’re wondering how to show proof of income, we’ve got you covered. Here are several ways you can get over this hurdle.
If you’re a traditional employee, an easy way to show proof of income is to gather your most recent paystubs as evidence that you’re employed and paid on a regular basis.
This is actually a great way to show proof of income for an apartment since most landlords are afraid that their tenants can’t pay rent reliably. So for this purpose, the more paystubs you can gather, the better.
Tax returns will show how much you’ve made in the last year and from which jobs (if you have multiple). Because it’s an official legal document, it’s widely accepted by those who ask for proof of income.
However, because it’s a general statement and it’s for the previous tax year, it’s not the most up-to-date proof of income you can provide. In that case, paystubs are a good alternative or supplement.
W-2 or 1099 MISC Statements
All employers have to fill out a W-2 for their employees. All you have to do is log on to access and print it out.
For proof of income for the self-employed, you’ll want to print out your 1099 MISC. This is similar to a W-2 but a form you have to fill out yourself. This legal document proves the income you’ve made in either a quarter or year.
Bank statements are also an excellent way to show proof of income, but it might be more time-consuming, especially if you don’t have a separate business account.
You’ll have to highlight deposits made from clients on your statements to show exactly what you earned and when.
While this can’t act as the sole proof of income document, creating your own paystub can be helpful, especially if you’re self-employed. This lets you gather up all your client information, such as the work done, hours spent, and the fee or rate charged.
You can simply fill in this blank paycheck stub and quickly generate documents as support for proof of income.
Know How to Show Proof of Income
When it comes to how to show proof of income, you now have several methods. Whether you’re an employee or self-employed, there are many ways you can show lenders, landlords, etc. that you have the money necessary to pay them.
So with this new knowledge, we hope you’re able to move forward with your exciting milestones. Good luck!
Now that you know more about proof of income documents, check out the rest of our blog page for more helpful tips.