Income Verification Letter is an official document which is used as an exhibit to give legal documentation of monthly income for your verification purpose which usually takes place when you apply for a mortgage, credit card, loan or for rental terms. Basically, this document serves as the proof of income for tax purposes. This can be of great help for employment verification and tax preparation. It is also important for home owners and landlords.
Before using an income verification letter template, you should be aware of some of the requirements that are being applied in many kinds of cases. The basic things to consider include the accuracy of the information stated in this document. Your letter must be accurate enough to back up the data provided by the employer. It must also be in compliance with the Fair Credit Reporting Act (FCRA) if you are filing for this with the national employer body. You must also take note that this letter cannot be used for collection purposes. The FCRA establishes the rules and regulations pertaining to employment background checks.
There are several ways of creating an income verification letter. Some prefer using Word or Document Proof Format (DTF) while others opt for using Adobe Acrobat or Open Office. The former would be preferable for those who do not have much experience on word or document formats and those who would need to use it often. However, for those who are familiar with these programs but would still want to create a good presentation on the subject, using Adobe Acrobat or Open Office may be preferable because of its multi-million dollar price tag. An example of a DTF document could look like this:
o Employment history – The first item contained in the document should be an outline of your employment history. In order to give your employer the best proof that you were employed for the period specified in the application form, include any proof that you were paid for hours worked. If your employer offers training on checking your income, provide a copy with the application. Provide a proof that your social security number was assigned at the time of your employment. The last item in your income verification letter should be your tax return for the previous year.
o Income details – Before actually filling out the application, it is important to check the details contained in your income verification letter. Make sure that all your income details are correct and provide relevant documentation to support your statements. For instance, if you have been assigned a monthly pay as a mechanic for your job, you should include this in your file. If you have been assigned a commission by a certain company for the sale of its products, provide details on the price you received for such services. Do not forget to include details on the company or person whom you have sold the product to.
o Employment history – Most employers check the employment history of their employees before they offer them a job. To prepare your income verification letters, identify the category in which your former employer falls under. This is important because most businesses categorize positions differently. For instance, if you had worked for a call center for three years, you can attach your work experience report from that company. Furthermore, if you have a Master’s degree qualification, attach copies of diplomas and certificates from educational institutions that you attended during your employment.
o Apartment community expenses – If you had been employed at an apartment community for at least three years, you are required by law to include your receipt for monthly housing costs in your income verification letter. This includes the cost of meals, shelter and other related expenses. It is better to attach one copy of this letter to each rental property in the apartment complex.
o Employment income verification letters – Most real estate companies need you to send them copies of your signed employment income verification letters. You are also required to send these letters to all mortgage brokers that the company has employed. The purpose of these letters is to let the broker know what you are entitled to based on your employment. In addition, you need to send these letters to the Internal Revenue Service to confirm that you were paid the taxes that you are liable for. It is important that you follow the rules when writing the letters because if you do not follow the requirements, the landlord or mortgage broker might end up denying you the apartment you want to rent or may not pay you your overdue property taxes.