Self Employed Solutions: How to Get Proof of Income

Trying to find a way to document proof of income?

Are you self-employed and finding your income difficult to prove?

One of the biggest problems self-employed people come across is trying to prove their income. If you’re trying to prove income to a landlord on a rental application or need income proof for another reason, you may be starting to feel hopeless. Luckily, there are ways to do it as long as you know a few simple tricks and tips.

Here are our recommendations for getting proof of income when you’re self-employed.

1. Use Your Annual Tax Returns

Using your annual tax returns is one of the easiest ways that you can prove your income when you work for yourself. Providing copies of your annual tax returns from the last couple of years will often be all you need when you’re applying for something that requires proof of income.

Unfortunately, the drawback to using your tax returns is that they aren’t always completely in line with what your income is currently, and they may not include projects that were off the books or smaller in scope.

2. Show Your 1099s

Another option for proving income is to use 1099 forms. Many self-employed individuals will get 1099s instead of W-2s from the clients and companies they work for. Using these can be helpful for proving income, and will sometimes be all you need for an application.

Unfortunately, 1099 income isn’t always the most accurate representation of what a self-employed person is making, however. They also may not serve you well if you’re trying to prove that your income is steady and regular.

3. Show Your Bank Statements

Banks statements are another good option for proving income when you’re self-employed. When your bank statement shows that multiple deposits are going into your account each month, it will be pretty clear to anyone that sees it that you’re getting paid somehow.

On the other hand, using bank statements may not be perfect if you’re not very organized and don’t have a dedicated bank account for your business. It may not be clear if some deposits aren’t work-related.

4. Create Paystubs

Another great option for getting proof of income when you work for yourself is to create your own paystubs. Using a paystub generator online you can pay yourself like a regular employer and create paystubs that can serve as proof your income whenever you need it.

Creating paystubs with a paystub generator is very easy, so this is one option you should definitely consider if none of the other options on this list will work for you.

5. Track Business Activity

The side effect of being very organized with your business is that it will also help you when it comes time to prove your income. If you’ve been keeping accurate profit and loss statements and have been documenting business activity, you may be able to use it when it’s time to fill in an important application.

If you’re trying to keep your business more organized, a chartered accountant can be a big help. You may also want to start using an online service such as Paypal that will track a large amount of your business activity automatically.

Finding the Best Proof of Income For Your Needs

If you’re self-employed, it’s important to realize that getting proof of income doesn’t have to be impossible. By using some of the tips above you’ll be able to find a method that works for you and will ensure that being self-employed doesn’t hold you back from having the other things you need in life.

Looking for more business tips? Click here to learn about the 5 business essentials you need to have in your startup.