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Home » Blog » What You Need to Know About Proof of Income

What You Need to Know About Proof of Income

Last updated March 13, 2025
What You Need to Know About Proof of Income

What is Proof of Income?

When applying for loans, leases, or credit, you may wonder, “What is proof of income?” It refers to any document that verifies your earnings and demonstrates financial stability. Employers, landlords, and financial institutions often request this information to assess an individual’s ability to meet financial obligations.

Consumers who need to lease a car or rent an apartment must provide proof of income to demonstrate their ability to make payments. The party leasing the car or renting the apartment needs evidence that you can afford the financial commitment. If you’re applying for a mortgage loan or refinancing a loan, you’ll also need to verify your income. Business owners often need to prove company earnings to rent or purchase assets.

Paystubs and Other Documents to Prove Income

Third-party evidence is the most reliable way to confirm proof of income. Here are some common methods used to verify earnings:

  • Paystub: Your pay stub is the most popular way to prove income paid by your employer.
  • Employment Verification Letter: An employment verification letter verifies income or salary and dates of employment.
  • Bank statements: Your bank statements document all incoming deposits, including payroll deposits, along with outgoing payments. Many individuals use bank statement proof of income when applying for financial services.
  • Tax forms: W-2s, 1099s, and other tax forms document the income you earn in a particular year.
  • Tax returns: Taxpayers use W-2s, 1099s and other documents to complete a personal tax return. Each line item in the income section of the tax return is supported by documentation that proves income.

For larger financial transactions, such as mortgage loans or refinancing, lenders may require all of these proof of income documents to verify your financial stability. Smaller transactions often require less documentation.

Understanding Documents that Report Income

A lease, rental agreement, or loan application may require you to provide the following proof of income documents:


Reviewing a Pay Stub

Employee Paystub

Most businesses are required to issue pay stubs to employees. When you enter into a small transaction, such as an apartment lease, the landlord may simply request a pay stub for proof of income.

The pay stub lists the details of an employee’s pay for the most recent pay period, and totals year-to-date. The document lists your salary or your hourly wages earned, including overtime, tips, and commission pay. Pay stubs list all deductions from pay, including income tax and FICA tax withholdings.

While pay stubs are widely accepted, some situations call for additional documentation. In these cases, applicants may need to compare a pay stub vs bank statement to determine which form of proof is more suitable…..

How to use Bank Statements as Proof of Income?

Many individuals who don’t receive traditional paystubs—such as freelancers and independent contractors—turn to bank statement proof of income. These statements show a record of consistent deposits and can demonstrate earning stability.

Financial institutions and landlords often ask, “How to use bank statements as proof of income?” The key is to provide several months of statements, highlighting regular income deposits and consistent balances that support financial responsibility.

Create Your Pay Stub


Filling Out Form W-4

Form W-4

Employees complete a W-4 when they are hired, or when they have a pay increase or a change in family status (child). The W-4 is used to calculate allowances, which help to determine the dollar amount of taxes withheld from pay.

An employee with five children, for example, has more exemptions on the personal tax return than a single taxpayer. Adding more W-4 allowances for children means that more taxes are withheld from pay.

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Understanding Form 1099-NEC

Form 1099-NEC

Form 1099-NEC reports taxable income paid to independent contractors (freelancers). Keep in mind that income taxes and FICA taxes are not withheld from payments to independent contractors. The contractor is responsible for tracking his or her income, and determining the tax liability on earnings.

Businesses who pay contractors must send all 1099s to the IRS each year, so that the IRS can verify that the contractor reported the payments as income. If a contractor is paid less than $600 during a particular year, a 1099 does not have to be issued. However, the income is still taxable to the contractor.

Create Your 1099-NEC


Information on Form W-2

Form W-2

Form W-2 documents the wages and tax withholdings paid to an employee during a tax year. Employers must issue W-2 to workers, so they can include the W-2 income on a personal tax return. Workers compute the tax liability and subtract the taxes withheld on the W-2 to determine the remaining taxes due for the year.

Create Your W-2


Save Time Managing Your Business

If you employ workers, you’re required to provide various tax forms to document their income. Ensuring accurate proof of income documents is essential for tax compliance, loan applications, and financial verification.

By using FormPros, you ensure that your employees and contractors have the necessary documentation for loans, housing applications, and tax filings—all while keeping your business operations efficient and hassle-free. Additionally, proof of income bank statements can be an alternative for those who don’t receive traditional pay stubs.

FormPros automates pay stub creation, tax form generation, and income verification, saving time and reducing administrative costs. Whether you need bank statement proof of income or pay stub verification, FormPros makes the process quick, easy, and affordable.

FormPros Has You Covered

Simplify your paperwork with FormPros! From creating paystubs, W-2s, and 1099-NEC forms to generating LLC Operating Agreements and even voided checks, our easy-to-use platform has you covered. Save time, reduce errors, and handle your business documents with confidence. Start now and see how FormPros makes professional form generation fast, affordable, and hassle-free!



Mark Mogilnitsky

Mark Mogilnitsky is a content writer specializing in Financial Form Generation, with a passion for simplifying complex processes for individuals and businesses. I thrive on crafting clear, engaging content that empowers users to navigate compliance and documentation with ease.

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