How do you show proof of income for self-employment?
There are going to be times in life when you need to show proof of your income, and it’s important to know how to do this if you’re self-employed. For instance, you may be trying to get a car loan or applying for an apartment to rent. Most businesses ask for pay stubs to show your most recent earnings. When you’re self-employed, you won’t have traditional pay stubs to prove your monthly income.
Just because you don’t have a regular 9-5 job doesn’t mean you can’t show a potential landlord or lender your worth. It’s important to specify on your application that your status is self-employed or that you’re a freelancer. Ask the loan or property management company what documentation they need, so you can keep your application moving forward.
One of the best proof of income sources for the self-employed is your federal tax returns. These documents will show your annual earnings along with other information to validate your data. You may have to show more than just your tax returns to verify that all the information is correct. Don’t worry though, because there are other options to help you.
You can use your bank statements to show that money is deposited into your account on a regular basis. Make sure to remove your bank account number to prevent fraud before sharing this important financial information with anyone, regardless of where they work or who they are. You can easily filter your bank account information to show only deposits covering a certain period. Most lenders and landlords want to see at least two months’ worth of verifiable income.
There are also online services that provide accounting features to help you track your incoming payments from clients. As a final note, it’s smart to keep all your income documentation easily accessible because you never know when you’ll need it.