Before handing over the keys to a two-bedroom, South-facing apartment with unented brick walls to a new tenant, a prospective landlord is going to ask for a few income verification papers from the applicant’s previous landlord. The landlord is not checking whether the tenant has a job; he is checking to make sure that the income reported by the tenant on income verification forms submitted to the landlord is accurate. Income verification is not simply a case of asking the prospective tenant to fill out an income verification form from their bank and forwarding it along to the landlord. It is a process, requiring detailed verification of every single income reference point, such as previous landlords and previous employment. Without the income verification, the landlord may find himself having to deny acceptance to a tenant just because the income verification forms were incomplete.
When you rent your home, it is very important that you know what is expected of you when it comes to income verification. First, as a renter, you must understand that each and every income reference point should be verified. In order to do so, it would be necessary to see chapter 4 of the fair housing laws for your area. In particular, you need to see what kind of documentation the landlord will be required to provide to support his claim that you are earning an income that justifies a reasonable rate of compensation based upon your level of employment and skills. There is a specific procedure for income verification in these cases, which is detailed in fair housing regulations. If you have been a long-term resident of this city, you will probably have seen all the instructions for obtaining these documents.
However, if you are just moving into this city, or if you are just applying for a lease, you may not have all the needed materials at hand. This is where a tax credit real estate agent can be of help. Landlords are often allowed to provide their income verification as a tax deduction on their income tax return. The property will be subject to evaluation of that amount, which could include a process of income comparison with what was reported on your federal tax return. As long as you were a residential tenant and had maintained a steady job for at least two years preceding your application for the tax credit, you should qualify for the tax reduction.
What if your income verification falls short of the required total annual income information? For starters, do not panic. There are still some options open to you. You can call the landlord and request a second set of income verification, along with supporting documentation such as pay stubs, utility bills, and so forth. If the verifier is unable or unwilling to provide this additional set of information, you may still qualify for the deduction.
Some landlords, in an effort to cut costs and reduce their liabilities, may not want or need to provide social security number proof when it comes to rent applications. However, many landlords do make their way towards providing all the necessary income information and employment verifications eventually. In that case, you can provide proof through your tax return that you met all the other requirements. Many tax filers who are involved in the self-employed category may be able to get away with supplying only their Social Security Number and driver’s license number.
Here are some examples of documents you can submit along with your tax return for verification purposes. If you are claiming an exemption due to a disabled person in your household, you should include medical expenses related to that individual that were detailed in the last year’s income release. Similarly, if you are claiming an exemption because you are a member of an insurable interest group, you should include proof that you are not a member of any such group. These documents will be considered as your supporting documentation and will be needed by the IRS agents when processing your tax return. If you fail to provide the correct documents and you are still denied, you can always request an extension until you are able to provide the necessary documentation.
One common way of proving one’s eligibility for a reduced amount is by producing a rental income letter that proves you have a steady source of income. The landlord has three months, starting on the day of the first year of tax filing to submit proof of one’s continuous employment. Your income letter is similar to a lease application and thus you should also send in the appropriate forms to be enclosed with your income tax return. The forms to be submitted must include proof that the income of the tenant is more than the amount specified on the income tax return.
For income tax year ending assets, you can include copies of your tax returns, your original pay stubs or a copy of your 10th annual paycheck stubs. All documents are to be sent via Certified Mail so that delivery confirmation is done and if there are additional returns that need to be attached to your tax return package, they can be mailed to the tax authority. In most cases, it takes about three months to receive your income verification results. Once all documents have been received and processed, you will receive a final W-2 statement showing the amount of excess tax deductions that you have been given.