Self-employed individuals have a flexible schedule because of working on their terms. This can be liberating but is also frustrating, especially when one needs to show proof of income.
This is because most business owners lack the necessary pay stubs that document their cash flows, making it tough to prove their proceeds.
Proof of income for self-employed persons is necessary when applying for a car loan, government benefits, tenancy, taxation, and insurance.
Whether self-employed or a freelancer, gathering proof of income doesn’t have to be difficult with these few simple strategies to obtain a pay stub below.
Here is how to show proof of income when self-employed.
File All Tax Returns Forms
Tax returns are one of the easiest ways to prove your income as a self-employed person. This is because every year, you will receive the relevant tax returns that document your yearly income.
Nevertheless, at times, tax returns may not be an actual representation of your income if you forget to recorded ‘off-the-books’ earnings or small project remunerations.
Proving your income can be easy if you have a business bank account that is separate from your bank account. This is because the bank statements can be used to show all your earnings as well as expenditures for the business.
Most organizations like banks, credit card firms, and rental agencies require a self-employed person to have a pay stub when they are applying for their services.
There are several online accounting software programs that you can use to track all payments and expenditures of your business.
For example, if you work online, PayPal is among the best services that will show you all cash inflows and outflows.
Other examples of accounting software that you can create a self-employed pay stub include ThePayStubs.com and firms like AP Sense, which also have 1099 forms and W-2 documents.
You don’t have to immediately pay for such software as you can first take advantage of their free demo and then decide if it’s worth paying for it in the long run.
Free paystub generators for self-employed are available to everyone, and all you have to do is;
- Select your state of residence
- Indicate if the pay stub is for self or a staff
- Fill in vital personal details
- Write the company information
- Type on the other additional fields such as pay, working hours and pay per hour, etc.
- Fill in any deductions or withholdings
After you are done filling the above information, submit and select the template that you like. And that’s it!
Keep Profit and Loss Documents
A profit and loss statement is another way that a business owner can use as proof of income, or they can hire a credit person to aid with the profit and loss statement.
The document must have all income expenses and deposits as well as the date when they are made.
In some circumstances, when you don’t have any other documentation to show to verify your income, using a personal contact can be your best bet.
A self-employed person can prove their income via a third party who can vouch on their behalf. This must be a person who knows you well enough, such as a work colleague, neighbor or your landlord.
Proof of Income
Constant documentation is imperative when you are working for yourself. This is because you receive no paycheck that shows all your earnings.
Presenting proof of income does not have to be a difficult task if you always file all the necessary documentation, such as profit and loss statements, bank statements, tax returns, expenses, and income.
Contact us to create a self-employed paycheck stub today!