PROOF OF INCOME
If you're a freelancer because you don't exactly want to work the Office life with the colleagues and the watercoolers, then you're self-employed.
If you earn a little here and there from Upwork, that's fine.
But if you're earning over $600 for over an extended period, then it's time to file income taxes.
The reason you want to file your income taxes is that you can be able to take out a loan, rent an apartment, purchase a car or open up a new bank account!
It's never good to just hustle and keep your money like no one's looking. Pretty soon, the IRS is going to catch up to you.
If you stick around we'll show you the steps of showing proof of income if you work as a Freelancer.
PROOF OF INCOME DOCUMENTS FOR FREELANCERS
1. Tax Returns
Tax returns are the most common proof of income documents and they're often required for loans and car rentals or purchases.
2. Keep your Online Payments
If you have Screenshots of your Online Payments, then keep them! You want to make sure that you're up to date and you can use them as proof of income as well. Keep screenshots and email them to yourself or if you're at Upwork and they're already Emailed to you, then keep your receipts of those payments.
They'll do all the hard work for you and they'll give you peace of mind! This way, all this time in the future where people ask you how much money you made last year won't stress you out because everything is taken care of.
3. Take note of your gross pay.
This is the total amount that you made before taxes and any other charges are taken out. It's the most important figure when it comes to figuring out your taxes.
4. Create Pay Stubs Online
Pay stubs are one of the best ways to show proof of income! This is because they show you how much you earn and your net pay!
5. Freelance Contracts
You may have a freelance contract when you first get started showing how much you can earn too. So using this form can be an excellent addition to your proof of income. Screenshot it and include it among your proof of income forms.
6. Ask for a Proof of Income Letter from your Freelance Clients
You can ask a proof of income letter from your freelance clients! If you need to take out a loan or rent an apartment urgently, you can always ask them.
7. Keep good records of all your online payments.
Even if you're not planning on filing taxes this year, it's always good to keep track of your income just in case. This way, if you need proof of income in the future, you have it! It's an easy way to keep track of what you're making and where your money is going!
8. Keep your Bank Statements
Your bank statements are the most direct way of showing your earnings. Your withdrawals and how much money is dropped at a given period are indicators that you've been earning this much. Proof of income for freelancers can come in different forms. The secret is just to record and track your income instead of just taking in cash from your customers.
CREATE PAY STUBS FOR YOUR FREELANCE JOB
If you want total freedom and creative control in reporting your income, you can create pay stubs.
Generating pay stubs is fast and easy and at pay stub direct, we have different pay stub templates and formats.
It's a great practice to keep track of how much you earn and to use your extra money to pay for your healthcare and social security.
Taking responsibility in this way means you are your own Employer and that you're doing things legitimately enough that tax season won't have to hound you.