Question about annual income verification

[Anonymous]

  *Sorry about the wall of text, just wanted to give some context. Also, I posted this once already but it appears to have been delted after I edited it. If this ends up as a double post, the mods can feel free to delete it. Also let me know if it was delted by the mods if I've somehow put this in the wrong location or broken some sort of rule about posting this here.*

  I applied for my first card ever in January (Discover IT) after living overseas for about 6 years, and wanted to grow my credit score in order to eventually qualify for a CSP or CSR in order to get in on the great travel benefits. In June I had my first official FICO score, which came back fairly high at 771 via TU, and so I tried to apply for the CSP as I figured my fico score would be high enough, but was denied for not having a long enough credit history.

   So I began browsing around here for tips on how to further grow the score a bit more, and saw many recommend the three card trick to just sit on for a while in order to "garden" up the score a bit. I then applied for the BoA travel card and was approved in July, and took off to Europe for a few weeks, and easily hit the $1000 reward for spending, so I figured when I get back I should put in an application for a third card to garden with. 

   I applied for the Amex Blue Everyday card on Monday, and although I was preappoved for it on the site, it went into pending. So I called them back today and asked if there was anything I need to validate for them since I wasn't instantly approved, and the CSR told they sent me a letter on Friday regarding what additional information they would need from me, but implied that it would probably be financial.

   Here's where we come to my question. My current situation is a bit unique, as my job only pays me $6000 a year. However, as part of my job I have addtional "income" given to me for my work. I have a new truck that's payed for including the insurance (maybe $500-600/mo), all of my gas (about $200/mo), rent and food ($600+/mo), school books (maybe around $400 per year) and other additional payments for various odd jobs and expenses. Besides that I also work for a local college that gives me  free excellerated education (to finish off my BA) in exchange for my help (maybe around $4000 a year or so), although our exact contract is a little unique as it's sort of a down payment on my eventually taking a position at the school as one of the professors after I finish my MA. 

   Anyways, when I added all of these numbers up the total ended up at about $27,000 per year,  although in reality I probably make slightly more. When I first called Discover I explained the situation to them and they informed me that I was allowed to claim all of that as part of my income. However, if the Amex letter I've been sent actually does want me to confirm my anual income, how would I go about "proving" all of that to them? My W2s only show my income at $6000, and I definitely don't want to be accused of any sort of fraud.

   Has anyone else been in a similar situation to this? I just find it odd that they would inquire, as $27k isn't like a terribly large number that would spark suspicion, and no other creditor has tried to verify this yet, especially since my credit score is decently high.  Or is this because I possibly opened up a BoA card two months prior, when my entire credit history in the US is only 8 months long? Or perhaps is all of this just due to the recent Equifax breach?

   I'm not freaking out about this or anything, but it does make me slightly nervous as I don't know what type of information they'll accept as being valid. Signed letters from the college dean and my employer? Would appreciate any insight that anyone on here might have.

Cheers!

[CreditInspired]

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@Anonymous wrote:

  *Sorry about the wall of text, just wanted to give some context. Also, I posted this once already but it appears to have been delted after I edited it. If this ends up as a double post, the mods can feel free to delete it. Also let me know if it was delted by the mods if I've somehow put this in the wrong location or broken some sort of rule about posting this here.*

  I applied for my first card ever in January (Discover IT) after living overseas for about 6 years, and wanted to grow my credit score in order to eventually qualify for a CSP or CSR in order to get in on the great travel benefits. In June I had my first official FICO score, which came back fairly high at 771 via TU, and so I tried to apply for the CSP as I figured my fico score would be high enough, but was denied for not having a long enough credit history.

   So I began browsing around here for tips on how to further grow the score a bit more, and saw many recommend the three card trick to just sit on for a while in order to "garden" up the score a bit. I then applied for the BoA travel card and was approved in July, and took off to Europe for a few weeks, and easily hit the $1000 reward for spending, so I figured when I get back I should put in an application for a third card to garden with. 

   I applied for the Amex Blue Everyday card on Monday, and although I was preappoved for it on the site, it went into pending. So I called them back today and asked if there was anything I need to validate for them since I wasn't instantly approved, and the CSR told they sent me a letter on Friday regarding what additional information they would need from me, but implied that it would probably be financial.

   Here's where we come to my question. My current situation is a bit unique, as my job only pays me $6000 a year. However, as part of my job I have addtional "income" given to me for my work. I have a new truck that's payed for including the insurance (maybe $500-600/mo), all of my gas (about $200/mo), rent and food ($600+/mo), school books (maybe around $400 per year) and other additional payments for various odd jobs and expenses. Besides that I also work for a local college that gives me  free excellerated education (to finish off my BA) in exchange for my help (maybe around $4000 a year or so), although our exact contract is a little unique as it's sort of a down payment on my eventually taking a position at the school as one of the professors after I finish my MA. 

   Anyways, when I added all of these numbers up the total ended up at about $27,000 per year,  although in reality I probably make slightly more. When I first called Discover I explained the situation to them and they informed me that I was allowed to claim all of that as part of my income. However, if the Amex letter I've been sent actually does want me to confirm my anual income, how would I go about "proving" all of that to them? My W2s only show my income at $6000, and I definitely don't want to be accused of any sort of fraud.

   Has anyone else been in a similar situation to this? I just find it odd that they would inquire, as $27k isn't like a terribly large number that would spark suspicion, and no other creditor has tried to verify this yet, especially since my credit score is decently high.  Or is this because I possibly opened up a BoA card two months prior, when my entire credit history in the US is only 8 months long? Or perhaps is all of this just due to the recent Equifax breach?

   I'm not freaking out about this or anything, but it does make me slightly nervous as I don't know what type of information they'll accept as being valid. Signed letters from the college dean and my employer? Would appreciate any insight that anyone on here might have.

Cheers!

---

I could be wrong, but I dont understand why the bartering and additional income, benefits, and services you are receiving are not reported as income to IRS by your employer so you can get a 1099 or fully accountable W2. I found this article on IRS website regarding what is considered taxable income. 

https://www.irs.gov/businesses/small-businesses-self-employed/what-is-taxable-and-nontaxable-income

IMHO, I would be worried if only $6K is being reported as income but you're stating $27K in income for other purposes.

However, I could definitely be wrong.

[BurgeoningHope]

Possibly relevant - are you married or partnered in any kind of a household-sharing way where you have access to your partner's income to pay bills?

You've been gone a while, and heck I didn't know this until recently either, but within those last six years there's been new legislation and CFPB's reading of the same. You may claim your partner's income as your own IFF it's effectively joint income. It used to be that you could claim only your own piece of the household income, but that was held to discriminate against homemakers and students.

This is only for credit cards, not for other loan types. Hope it applies to your situation!

[Anonymous]

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@CreditInspired wrote:

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@Anonymous wrote:

  *Sorry about the wall of text, just wanted to give some context. Also, I posted this once already but it appears to have been delted after I edited it. If this ends up as a double post, the mods can feel free to delete it. Also let me know if it was delted by the mods if I've somehow put this in the wrong location or broken some sort of rule about posting this here.*

  I applied for my first card ever in January (Discover IT) after living overseas for about 6 years, and wanted to grow my credit score in order to eventually qualify for a CSP or CSR in order to get in on the great travel benefits. In June I had my first official FICO score, which came back fairly high at 771 via TU, and so I tried to apply for the CSP as I figured my fico score would be high enough, but was denied for not having a long enough credit history.

   So I began browsing around here for tips on how to further grow the score a bit more, and saw many recommend the three card trick to just sit on for a while in order to "garden" up the score a bit. I then applied for the BoA travel card and was approved in July, and took off to Europe for a few weeks, and easily hit the $1000 reward for spending, so I figured when I get back I should put in an application for a third card to garden with. 

   I applied for the Amex Blue Everyday card on Monday, and although I was preappoved for it on the site, it went into pending. So I called them back today and asked if there was anything I need to validate for them since I wasn't instantly approved, and the CSR told they sent me a letter on Friday regarding what additional information they would need from me, but implied that it would probably be financial.

   Here's where we come to my question. My current situation is a bit unique, as my job only pays me $6000 a year. However, as part of my job I have addtional "income" given to me for my work. I have a new truck that's payed for including the insurance (maybe $500-600/mo), all of my gas (about $200/mo), rent and food ($600+/mo), school books (maybe around $400 per year) and other additional payments for various odd jobs and expenses. Besides that I also work for a local college that gives me  free excellerated education (to finish off my BA) in exchange for my help (maybe around $4000 a year or so), although our exact contract is a little unique as it's sort of a down payment on my eventually taking a position at the school as one of the professors after I finish my MA. 

   Anyways, when I added all of these numbers up the total ended up at about $27,000 per year,  although in reality I probably make slightly more. When I first called Discover I explained the situation to them and they informed me that I was allowed to claim all of that as part of my income. However, if the Amex letter I've been sent actually does want me to confirm my anual income, how would I go about "proving" all of that to them? My W2s only show my income at $6000, and I definitely don't want to be accused of any sort of fraud.

   Has anyone else been in a similar situation to this? I just find it odd that they would inquire, as $27k isn't like a terribly large number that would spark suspicion, and no other creditor has tried to verify this yet, especially since my credit score is decently high.  Or is this because I possibly opened up a BoA card two months prior, when my entire credit history in the US is only 8 months long? Or perhaps is all of this just due to the recent Equifax breach?

   I'm not freaking out about this or anything, but it does make me slightly nervous as I don't know what type of information they'll accept as being valid. Signed letters from the college dean and my employer? Would appreciate any insight that anyone on here might have.

Cheers!

---

I could be wrong, but I dont understand why the bartering and additional income, benefits, and services you are receiving are not reported as income to IRS by your employer so you can get a 1099 or fully accountable W2. I found this article on IRS website regarding what is considered taxable income. 

https://www.irs.gov/businesses/small-businesses-self-employed/what-is-taxable-and-nontaxable-income

IMHO, I would be worried if only $6K is being reported as income but you're stating $27K in income for other purposes.

However, I could definitely be wrong.

---

Agreed. I suspect that the IRS would be very interested in taxing 27k vs 6k. You may want to run your situation by a professional. As for the cc, that'll be the least of your worries if the IRS decides to look deeper... 

[steelers1]

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@Anonymous wrote:

  *Sorry about the wall of text, just wanted to give some context. Also, I posted this once already but it appears to have been delted after I edited it. If this ends up as a double post, the mods can feel free to delete it. Also let me know if it was delted by the mods if I've somehow put this in the wrong location or broken some sort of rule about posting this here.*

  I applied for my first card ever in January (Discover IT) after living overseas for about 6 years, and wanted to grow my credit score in order to eventually qualify for a CSP or CSR in order to get in on the great travel benefits. In June I had my first official FICO score, which came back fairly high at 771 via TU, and so I tried to apply for the CSP as I figured my fico score would be high enough, but was denied for not having a long enough credit history.

   So I began browsing around here for tips on how to further grow the score a bit more, and saw many recommend the three card trick to just sit on for a while in order to "garden" up the score a bit. I then applied for the BoA travel card and was approved in July, and took off to Europe for a few weeks, and easily hit the $1000 reward for spending, so I figured when I get back I should put in an application for a third card to garden with. 

   I applied for the Amex Blue Everyday card on Monday, and although I was preappoved for it on the site, it went into pending. So I called them back today and asked if there was anything I need to validate for them since I wasn't instantly approved, and the CSR told they sent me a letter on Friday regarding what additional information they would need from me, but implied that it would probably be financial.

   Here's where we come to my question. My current situation is a bit unique, as my job only pays me $6000 a year. However, as part of my job I have addtional "income" given to me for my work. I have a new truck that's payed for including the insurance (maybe $500-600/mo), all of my gas (about $200/mo), rent and food ($600+/mo), school books (maybe around $400 per year) and other additional payments for various odd jobs and expenses. Besides that I also work for a local college that gives me  free excellerated education (to finish off my BA) in exchange for my help (maybe around $4000 a year or so), although our exact contract is a little unique as it's sort of a down payment on my eventually taking a position at the school as one of the professors after I finish my MA. 

   Anyways, when I added all of these numbers up the total ended up at about $27,000 per year,  although in reality I probably make slightly more. When I first called Discover I explained the situation to them and they informed me that I was allowed to claim all of that as part of my income. However, if the Amex letter I've been sent actually does want me to confirm my anual income, how would I go about "proving" all of that to them? My W2s only show my income at $6000, and I definitely don't want to be accused of any sort of fraud.

   Has anyone else been in a similar situation to this? I just find it odd that they would inquire, as $27k isn't like a terribly large number that would spark suspicion, and no other creditor has tried to verify this yet, especially since my credit score is decently high.  Or is this because I possibly opened up a BoA card two months prior, when my entire credit history in the US is only 8 months long? Or perhaps is all of this just due to the recent Equifax breach?

   I'm not freaking out about this or anything, but it does make me slightly nervous as I don't know what type of information they'll accept as being valid. Signed letters from the college dean and my employer? Would appreciate any insight that anyone on here might have.

Cheers!

---

Just to answer your question honestly.

Amex wants your income that is on your tax return.

I understand what your saying however if its not on your tax return it doesn't exist.

If your employer is providing you with all of the above then you should have received a 1099 stating the value.

Thats the only way your emploer could write the expenses off it only makes sense.

Best of luck.

[Anonymous]

Thanks everyone for your input.

I should probably explain the situation a bit further as it might make it a bit clearer, and probably won't sound as sketchy.

I came back to the States to work with my father. However, where I'm helping/working doesn't have a large budget as they're just barely breaking even. My father/boss has multiple sources of income though, so he's the one that foots the bill for everything else.

So the income isn't technically "payment" for what I do, and my dad isn't paying me "off the books" or anything like that. As part of being home and helping him out he provides the payment for all of the stuff listed above out of his own pocket, save the college tuition, mostly just because he's happy to have me back. So I'm not sure if this would qualify under household income or what, but the reason I started counting it was the service representative that I talked to from Discover said that they would accept all of that as income when I explained my situation to them during my initial application.

The last thing I want to do is lie or hide income or whatever on my cc application/taxes. I just am not sure now what proper protocol is for all of this.

[Anonymous]

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@Anonymous wrote:
Thanks everyone for your input.

I should probably explain the situation a bit further as it might make it a bit clearer, and probably won't sound as sketchy.

I came back to the States to work with my father. However, where I'm helping/working doesn't have a large budget as they're just barely breaking even. My father/boss has multiple sources of income though, so he's the one that foots the bill for everything else.

So the income isn't technically "payment" for what I do, and my dad isn't paying me "off the books" or anything like that. As part of being home and helping him out he provides the payment for all of the stuff listed above out of his own pocket, save the college tuition, mostly just because he's happy to have me back. So I'm not sure if this would qualify under household income or what, but the reason I started counting it was the service representative that I talked to from Discover said that they would accept all of that as income when I explained my situation to them during my initial application.

The last thing I want to do is lie or hide income or whatever on my cc application/taxes. I just am not sure now what proper protocol is for all of this.

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You are counting part of your dad's income as your own?  I don't see how you could count rent or food money as income if you are living at home.  Seems like you misstated your income now you have to deal with the consquences.  Do you have any real income at all?  Your explanation makes things seem more sketchy. I think I woul d just let Amex close my accounts.  Apply again when you have a job. 

[Anonymous]

I do work, and am on payroll, but that's only the 6k part. My dad always had a deal with me that if I came back to the States to help him and was in school full time that he would pick up the bills for all of my living expenses, so that's what he's currently doing. I mean, I could ask him to put the money in my hand I suppose and go and pay all of the stuff myself, but it was always extra steps.

[BurgeoningHope]

I'm thinking it might not be a horrible thing to have a consult with a tax attorney just to make sure that you AND your father are on the right side of the tax law. I for one am not finding your situation sketchy, but it might or might not be meeting the oh so picky requirements of tax law.

Your father is entitled to make whatever gifts he likes to you, but they're only tax-free to a limit. If those gifts are coming to you to ease your return to this country, that's one treatment. If they're in exchange for work, they're no longer gifts, but "compensation", and subject to a different set of rules. I am not a tax expert, but your situation seems to me as though it would benefit from one.

If you go this route, I suggest you make sure you have a tax _attorney_ and not just some other kind of expert, such as an "enrolled agent". EAs know taxes, but in case you guys are violating some tax law, you may want attorney/client protections in order to discuss things frankly.

NOT saying this to scare you, not at all! I think you both would benefit by having peace of mind that your unusual situation is tax-okay, and by knowing exactly how to present it to the IRS and to lenders - it may well be different for each. If your situation isn't tax-okay, better to attend to that sooner rather than later. And there are other considerations for you, such as making sure you don't shoot yourself in the foot years down the line by having only a tiny income reported for social security purposes. When your benefit is calculated, they use your top 35 earnings years to do it. That's a huge chunk of one's working life. You don't want many 6K years if you can help it.

[Anonymous]

Thanks for the reply. Yeah, I'll definitely look into it. I only put that amount down to begin with because the initial account reviewer I was speaking with over the phone at Discover told me to claim all of that when I explained my situation to them during my application. I had just assumed that annual income worked the same across the board and counted for any income that is available to you over the year.