13 Aug Income Verification for Self-Employed Rental Applicants
How to Verify Income When You’re Self-Employed
If you’re self-employed or own your own business and have applied to rent a property from Integrity Realty & Management, verifying your income works a little differently than it does for a traditional W-2 employee.
One of the most common issues we encounter with self-employed applicants is receiving business bank statements instead of personal bank statements. Unfortunately, business bank statements cannot be used to verify your personal income.
Here’s what you need to know.
Option 1: Personal Bank Statements
Self-employed applicants may provide their most recent bank statements to document income. However, they must be PERSONAL bank statements showing the income deposited into your personal account.
We cannot use deposits into a business bank account as proof of personal income.
Why? Because business revenue and personal income are not the same thing.
For example, your business may receive $100,000 in deposits during a month, but that does not mean you personally earned $100,000. Those funds may need to pay employee payroll, inventory, rent, advertising, insurance, taxes, supplies, and other business expenses.
We therefore cannot determine your personal income based solely on deposits into a business account.
If your business pays you through regular transfers, distributions, payroll, or other payments into your personal account, your personal bank statements showing those deposits can be used to help verify the income you actually receive.
What to Submit
Provide your two most recent months of PERSONAL bank statements showing the deposits representing income paid to you.
Please do not submit business bank statements in place of personal bank statements.
Option 2: Your Most Recent Personal Tax Return
Self-employed applicants may also provide their most recent filed PERSONAL federal income tax return.
We can use the Adjusted Gross Income (AGI) reported on your tax return to verify your documented income.
This can be especially helpful for business owners whose income varies from month to month or who do not regularly transfer a consistent amount from their business into their personal bank account.
Help Us Process Your Application Faster
Providing the correct income documentation from the beginning can help prevent delays in processing your rental application.
If you are self-employed, remember:
Personal bank statements = Yes
Business bank statements = No
Most recent federal tax return showing AGI = Yes
For additional information about our rental qualification requirements, please review Integrity Realty & Management’s Qualification Guidelines.
