I live in a section 8. How should I deal with starting a small business?

[de3ik]

What is the name of your state (only U.S. law)? Michigan

My mother and I live in a section 8 and have had some difficulties with the management other years so she wanted me to seek legal advice before I proceed. I apologize if this is the wrong forum to ask this question in, but I am new here and thought this forum would be most appropriate.

I want to do online affliate marketing and that will require a tax id. She told me this was required to be given to the management when you also have a regular job. She wanted to know if there would be any issues with me giving them my tax id as I have yet to make any money from the marketing and of course with section 8 housing they go according to your income. Since this will not be static income she was concerned that they could cause issues with our rent status as my earnings from the marketing could vary month to month. How exactly does a section 8 deal with a business owner or the like who doesn't have a static income? How would that affect the rent?

How should I best proceed with this? Is there any other research I could do about this outside this forum? We don't want to ask them any questions because they have been problematic to us over the years with various issues and my mother is especially concerned about how they would deal with this. Please give me all the advice I would need to proceed so I could submit my information to them with no problem.

Thank you,

de3ik

 

[mmmagique]

I am assuming they would average out your income over a certain amount of time. After a month or two, you'll have a pretty good idea of what you'll be making week to week (or until things get better/worse in your business)

The best way, of course, is when you pay your taxes, and you can give them all of the information you give to Uncle Sam, but that will have to wait until next year since it's so close to the end of the year.

 

[LdiJ]

What is the name of your state (only U.S. law)? Michigan

My mother and I live in a section 8 and have had some difficulties with the management other years so she wanted me to seek legal advice before I proceed. I apologize if this is the wrong forum to ask this question in, but I am new here and thought this forum would be most appropriate.

I want to do online affliate marketing and that will require a tax id. She told me this was required to be given to the management when you also have a regular job. She wanted to know if there would be any issues with me giving them my tax id as I have yet to make any money from the marketing and of course with section 8 housing they go according to your income. Since this will not be static income she was concerned that they could cause issues with our rent status as my earnings from the marketing could vary month to month. How exactly does a section 8 deal with a business owner or the like who doesn't have a static income? How would that affect the rent?

How should I best proceed with this? Is there any other research I could do about this outside this forum? We don't want to ask them any questions because they have been problematic to us over the years with various issues and my mother is especially concerned about how they would deal with this. Please give me all the advice I would need to proceed so I could submit my information to them with no problem.

Thank you,

de3ik

Most small businesses do not make any money, or at least any profits for a year or two, and profits is what counts as income, not gross sales. In my opinion you should hold off talking to the management until you see if you are actually going to make any money, and how much.

 

[DeenaCA]

It's true that only net self-employment income (after any expenses) is counted in the family's total annual income for the housing choice voucher program ("Section 8"). The family share of rent in the program is based on 30% of "adjusted monthly income", so if you start to earn $100/month (after expenses), your rent would be expected to increase by about $30/month.

You are required to notify the housing authority when you start self-employment, even though you don't know how much you will make. Your family obligations under the program include promptly notifying the housing authority of such changes, and all information must be true and complete. The time limit for reporting changes is usually 10 days. Violation of reporting responsibilities could lead to termination of housing assistance.

The housing authority may not make any adjustment to your rent until the next annual reexamination, or they may try to estimate your income from self-employment. If asked, don't base your estimate on what you hope to make. Let the staff know that you will not get paid until A, B & C happen. As noted, it will be easier to make an estimate after you've been self-employed for awhile.

For more information on family obligations and the calculation of family rent, see HUD's Housing Choice Voucher Guidebook at http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/hcv/forms/guidebook.

 

[de3ik]

It's true that only net self-employment income (after any expenses) is counted in the family's total annual income for the housing choice voucher program ("Section 8"). The family share of rent in the program is based on 30% of "adjusted monthly income", so if you start to earn $100/month (after expenses), your rent would be expected to increase by about $30/month.

You are required to notify the housing authority when you start self-employment, even though you don't know how much you will make. Your family obligations under the program include promptly notifying the housing authority of such changes, and all information must be true and complete. The time limit for reporting changes is usually 10 days. Violation of reporting responsibilities could lead to termination of housing assistance.

The housing authority may not make any adjustment to your rent until the next annual reexamination, or they may try to estimate your income from self- employment. If asked, don't base your estimate on what you hope to make. Let the staff know that you will not get paid until A, B & C happen. As noted, it will
be easier to make an estimate after you've been self-employed for awhile.

For more information on family obligations and the calculation of family rent, see HUD's Housing Choice Voucher Guidebook at http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/hcv/forms/guidebook.

Thanks for your excellent reply. I had some questions as follows. Please give your best advice as I will need it to follow up. I appreciate your help.

1. You said I would have to notify the management when I start self employment. Does the self employment status begin at the inception of the tax id or when I begin to make income? I would be using the Amazon Affiliate program.

2. Section 8 housing is very invasive when it comes to wanting to know about your information as pertains to your income status for purposes of determining rent as I'm sure you know. My mother had to get information to declare her zero income status from social security. They refused to believe she had no income without documentation from the government. Also when you are zero income they make you fill out monthly paperwork to declare that status until it changes. I say that to ask this. Since they are so invasive with asking for information I want to be prepared. Since you said "The housing authority may not make any adjustment to your rent until the next annual reexamination, or they may try to estimate your income from self-employment. If asked, don't base your estimate on what you hope to make. Let the staff know that you will not get paid until A, B & C happen. As noted, it will be easier to make an estimate after you've been self-employed for awhile." If they ask me to prove that I have made NO INCOME from my self employment and want me to prove this, how would I go about that. It has been our experience in living here that I would be asked to prove my income or lack thereof. Based on what you are saying providing my tax ID to them wouldn't be enough proof that I haven't made anything yet. So how exactly do I prove I have made $0, $100, etc? What if they ask to see documentation from my bank records or the like? Please don't doubt this as the management are EXTREMELY invasive with their questioning.

3. My mother was concerned about how far this could go since they are so invasive. With an offline job section 8 (at least our management) sends documentation to your employer and they sign off on it and you give it to management along with your tax ID to declare your work status. However self employment is different. She was concerned that they would want to contact Amazon or want to view information about my payment history since this is an online self employment. This may sound unusual, but they have made unusual requests during our tenure so I want to know my rights. What can they ask and what is against the law for them to ask about my self employment? I don't want to have to pursue anything legally as that is beyond my financial range, however I do want to be able to know how to tell them that they have no right to pursue information that is illegal for them to obtain. Please tell me what is legal and where I can read online as to my rights about this specific topic with section 8 as relates to self employment.

4. Finally, what would I do if I told the management that I will not get paid until A, B, C happen and they tried to pressure me to give a date or specific earnings amount per month? For instance If I said My earnings are contingent upon small commissions and are on certain usually smaller amounts adding up during the month and that I will be paid every other month (ie payment for june is made in late August or Payment for November is made in late January of the following year (approximately 60 days after Nov. 30). I will not know what amount of earnings I will have until my self employment has established a track record of earnings and that could take months or longer to establish. I also may make no money at all. If they press this and try to pinpoint a date and number what should my response be? Again they are invasive and their prior demands are forcing me to be prepared, because I don't want any surprises in my rent or housing status.

Thank you for your help and your efforts. I very much appreciate everyone's time.

de3ik

 

[mmmagique]

Set up a separate bank account just for your income from self-employment. You may remove money from it, but don't use it as a regular account (such as using a debit card from it except for business expenses) That way, when they want proof of your income, you can hand them your bank statements.

 

[DeenaCA]

I'm a little confused as to what type of assisted housing you're receiving. If you are on the voucher program, you would be reporting your income to a case worker at the housing authority, not to the building managers. Do you know what type of housing it is or the name of the specific program?

1. Any increase in rent would become effective after you start to receive income. Provide documentation of the lag in payment dates. Provide documentation of any fees you'd have to pay.

2. Regarding families claiming zero income, it sounds like the housing authority (or managers?) are following the HUD guidelines. When a family claims to have no income, especially for an extended period, the PHA (housing authority) is supposed to require a credible explanation of how the family's needs are being met. Here's the current guidance from http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_10760.pdf:

When families report zero income, and have no income excluded for rent computation, PHAs have an obligation to pursue verification of income that reflects the family's lifestyle. One method is to examine the family's circumstances every 60 to 90 days until they have a stable income. It is recommended that PHAs request zero income families to complete a zero income form. The form asks residents to estimate how much they spend on: telephone, cable TV, food, clothing, transportation, health care, child care,
debts, household items, etc. and whether any of these costs are being paid by an individual outside the family.
If any such payments are received they are to be considered income.

The form is the "Zero Income Checklist" at http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_10769.pdf. It sounds like your mom is being asked to complete something similar. This is what HUD requires the PHA to do.

3 & 4: As far as estimating your income from self-employment, the PHA pretty much has to do the best it can until there is a track record. Since there is a long lag before payment, you might offer to keep the PHA updated on a monthly basis. If they estimate a figure and you do not earn that much, wait until your first pay amount is known, then contact your worker and ask for a rent adjustment. For example, if they estimate $50/month but you only earn $5 or $10 the first month or two, you have the right to request an adjustment to the actual numbers. You could document the actual amounts by providing a printout of whatever you receive from Amazon.

What can they ask and what is against the law for them to ask about my self employment? I don't want to have to pursue anything legally as that is beyond my financial range, however I do want to be able to know how to tell them that they have no right to pursue information that is illegal for them to obtain.

It is not illegal for them to ask you anything about your self-employment. You are required to provide any information the PHA requests regarding your income. This is one of the obligations you agreed to when you were admitted to the program.

Please tell me what is legal and where I can read online as to my rights about this specific topic with section 8 as relates to self employment.

If you are on the voucher program, check out Chapter 5 in the HCV Occupancy Guidebook linked in post #4.

 

[de3ik]

I'm a little confused as to what type of assisted housing you're receiving. If you are on the voucher program, you would be reporting your income to a case worker at the housing authority, not to the building managers. Do you know what type of housing it is or the name of the specific program?

1. Any increase in rent would become effective after you start to receive income. Provide documentation of the lag in payment dates. Provide documentation of any fees you'd have to pay.

2. Regarding families claiming zero income, it sounds like the housing authority (or managers?) are following the HUD guidelines. When a family claims to have no income, especially for an extended period, the PHA (housing authority) is supposed to require a credible explanation of how the family's needs are being met. Here's the current guidance from http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_10760.pdf:


The form is the "Zero Income Checklist" at http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_10769.pdf. It sounds like your mom is being asked to complete something similar. This is what HUD requires the PHA to do.

3 & 4: As far as estimating your income from self-employment, the PHA pretty much has to do the best it can until there is a track record. Since there is a long lag before payment, you might offer to keep the PHA updated on a monthly basis. If they estimate a figure and you do not earn that much, wait until your first pay amount is known, then contact your worker and ask for a rent adjustment. For example, if they estimate $50/month but you only earn $5 or $10 the first month or two, you have the right to request an adjustment to the actual numbers. You could document the actual amounts by providing a printout of whatever you receive from Amazon.



It is not illegal for them to ask you anything about your self-employment. You are required to provide any information the PHA requests regarding your income. This is one of the obligations you agreed to when you were admitted to the program.



If you are on the voucher program, check out Chapter 5 in the HCV Occupancy Guidebook linked in post #4.

Thank you so much for such an excellent reply! I really appreciate your information and the information of the prior members.

We are not on a voucher program, but rather section 8 subsidized housing. I hope that clears up any confusion. We have to report to our management during the annual re certification and anytime before then concerning rent adjustments. We have never worked through a case worker at all, just the management. I'm in Michigan if it helps.

1. I am still not understanding when I would have to report my self employment though. Would I have report it when I got my tax ID since I would officially be a sole proprietor? You said I only have 10 days so I want to be sure.

2. To your knowledge how unusual is it for people living in section 8 housing to be self employed? And how unusual is it for it to be internet based? My mother felt this was extraordinary unusual for this to occur and felt this would be a tremendous problem when it came to reporting to our management. People with offline jobs will just submit their information and it be no problem because the system is set up for their bosses sign the paperwork and send it back it to them, but in my case all I would have is my tax ID and my own reporting. How big of a problem do you think I should anticipate this being with them? My self employment would be purely internet based with no connection to an offline business owner model.

3. Is there any information I can reference from HUD or section 8 about what the guidelines are concerning being self employed and your income? Do you have more links specifically for that as well? I would appreciate them if you do, because it would be very helpful for my knowledge concerning this.

Thanks again,

de3ik

 

[DeenaCA]

We are not on a voucher program, but rather section 8 subsidized housing.

OK, this falls under HUD's "Multifamily" programs. The program rules are explained in Handbook 4350.3 at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh/4350.3. See Chapter 5 for the rules on income.

Some circumstances present more than the usual challenges to estimating
anticipated income. Examples of challenging situations include a family that has
sporadic work or seasonal income or a tenant who is self-employed. In all
instances, owners are expected to make a reasonable judgment as to the most
reliable approach to estimating what the tenant will receive during the year.

1. As noted earlier, you should report your self-employment within 10 days of starting it.

2. It is not at all unusual for assisted housing residents to try to make money online. The managers are familiar with self-employment. It's covered in their manual. In addition to your own reporting and tax ID, I imagine you will have documentation from Amazon of the amounts earned. Print this and submit it to the manager.

3. See "Income from a Business" in Chapter 5 of Handbook 4350.3.

 

[de3ik]

OK, this falls under HUD's "Multifamily" programs. The program rules are explained in Handbook 4350.3 at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh/4350.3. See Chapter 5 for the rules on income.



1. As noted earlier, you should report your self-employment within 10 days of starting it.

2. It is not at all unusual for assisted housing residents to try to make money online. The managers are familiar with self-employment. It's covered in their manual. In addition to your own reporting and tax ID, I imagine you will have documentation from Amazon of the amounts earned. Print this and submit it to the manager.

3. See "Income from a Business" in Chapter 5 of Handbook 4350.3.

I am really appreciating your replies on this as they are helping me a lot with my decision. Is there anymore advice you or anything can give on this topic? Is there anymore material I would need to reference? I want to know as much as I can before I finally go into my management and discuss this with them.

Thanks so much for your help on this. I couldn't have figured these things without you!

de3ik

 

[Banned_Princess]

I am really appreciating your replies on this as they are helping me a lot with my decision. Is there anymore advice you or anything can give on this topic? Is there anymore material I would need to reference? I want to know as much as I can before I finally go into my management and discuss this with them.

Thanks so much for your help on this. I couldn't have figured these things without you!

de3ik

How old are you that you are on your moms case?

 

[de3ik]

How old are you that you are on your moms case?

I am an adult. I am not on my mom's case. We just live together here.