What to Show as Proof of Income When You’re Self-Employed
What is proof of income?
Proof of income is any document that proves that you’re earning.
This can come in the form of a pay stub, a W-2 Form, a 1099 form, or a bank statement.
And you get these by either asking them from your employer or by making your own proof of income statements.
If you're self-employed it gets easier to manage your own time because you are your own boss.
The challenge then lies in how you're going to prove you're making revenues authentically and using those proof of income documents for almost every important transaction which you have.
The Importance of Having Proof of Income
To rent an apartment
If you’re going to start living on your own then having proof of income statement to prove that you can actually make a month’s rent is vital.
This is where getting a pay stub comes in handy if you’re planning to rent an apartment.
Or if you’re going to rent an office.
To purchase a car
Some day you’re going to have to stop taking the metro or the bus all the time.
Getting yourself a new car will require you to prove that you can pay for the vehicle!
This is why proof of income is immensely valuable for would-be car owners.
To secure a credit card or loan
Or maybe you’re an entrepreneur and you want to secure funding?
Then proving your sources of income and that you have your capital expenses and revenues to help you pay for your credit card or loan for whatever reasons you’re using them is going to be important.
To prove you are qualified for a job
If you want to show you have a great track record.
Maybe you want to be a manager or supervisor and your current HR wants to see how well you’ve performed!
Then proof of income documents are still going to come in handy.
These statements are vital if you want to show legitimacy.
To avail government benefits
Taking advantage of what the government can offer is vital!
Maybe you want to secure a government loan or medicare, then showing that you’re earning regularly is important.
And if you’re working for a company? You get pay stubs of course.
But if you’re self-employed then sometimes the proving is something you’re going to have to do.
To prove you are qualified for a mortgage
Taking out a mortgage is a huge responsibility.
Lenders usually want to know that their customers can hand in the cash when they need to.
Entrepreneurs have to show they’re earning consistently.
This is why you can use pay stubs to ensure that you’re showing that your earnings are legit.
How do you prove your income if you’re self employed?
Income Tax Returns
Income Tax Returns are documents that are filed by taxpayers who have received income during the year.
The Income Tax Return forms are available on the IRS website.
As an individual or business owner, you are required to file an Income Tax Return if you have any of the following income items
There are two main types of income tax returns:
Annual Income Tax Return (Form 1040)
This is the form that most taxpayers will use.
It is used to report your income and calculate your tax for the year.
It is also used to calculate your tax for the year.
It is used to report capital gains to the IRS and to the taxpayer.
It also reports the amount of taxes withheld.
It is important because the information will be used to determine how much taxes you owe and will be used to verify if you have been paying taxes on your dividends and capital gains.
The purchases and withdrawals you make from your banks are very straightforward ways of proving your income.
These documentations are almost indisputable since it shows the movement of cash.
These are great shortcuts to revealing how much you earn and how you’ve been spending your money.
The good thing about bank statements is that you have immediate access to them.
But they may only come if you’re employed by someone else.
Proof of Income Letter
You can also ask your employer to give you a letter showing how much you’re earning or how long you’ve worked in your job.
Even just showing your monthly salary or your hourly rate is good enough if you want to prove with legitimacy that you are earning and your money comes from a legitimate source.
Generate Pay Stubs Online (Use a paystub generator)
You can also use a free paystub generator online to make sure that you can prove your income on your terms and make sure you also control what appears on it.
Can I make pay stubs for myself if I’m self employed?
Yes you can! PayStub Direct has various paystub designs and templates and it’s up to you to choose which format you like.
Generating your pay stub is as easy as filling in your information, previewing it.
Making sure you make changes if you need to. And buying if you’re happy!
Proving your income typically comes through showing your pay stubs if you’re an employee, showing your tax returns, revealing your bank statements, or taking advantage of an online paystub generator.
An online check stub maker can help you go a long way in documenting your earnings and is a fantastic alternative if you’re wanting to show your earnings real quick.