Approximately 15 million workers in the U.S. are self-employed.
If you’re part of this group, you know that there are a lot of perks that accompany being your own boss. There are also a lot of challenges, though, especially when you’re trying to qualify for a loan or get approved for an apartment and have to provide proof of income.
The good news is that this is much easier to do than it was a few years ago. Read on to learn about some of the simplest ways you can show proof of your income as a self-employed worker.
Use Your Tax Returns
In many cases, when you’re applying for a loan, trying to rent an apartment, or doing anything else that requires proof of income, a copy of your most recent tax returns will get the job done.
Talk to your lender (or whoever it is that’s requiring proof of your income) and see if they will accept copies of your returns.
Keep in mind, though, that your tax returns might not be the most accurate representation of your income. This is especially true if you write off a lot of expenses each year.
Use Your Bank Statements
Sometimes, you can also print out copies of your bank statements and use them as proof of your income.
Online banks usually make it easy for you to filter your deposits and withdrawals so you can show how much money you’ve made in the last year or two.
It’s best to take this approach if you have a separate business bank account since it shows a more accurate representation of what you’ve earned.
Hold Onto Profit and Loss Statements
Be sure to hold onto your business’s profit and loss statements, too. They can show a lender or landlord a clear picture of how much money you’re working with on a monthly or yearly basis.
Profit and loss statements are usually not sufficient proof on their own, but they’re a good secondary source to use along with one of these other options.
Use a Paystub Generator
There are lots of online tools (many of which are free or low-cost) that make it easy for you to track payments and keep track of how much money you’re bringing in.
An online PayStubCreator can help you manage your business finances and keep a record of every payment you receive. This, in turn, can provide you with easy-to-read, detailed documents to provide when someone requires proof of your income.
Provide Proof of Income Today
If you’ve been having a hard time getting approved for a loan or just want to be prepared when the time comes, this information about how to provide proof of income will be very handy.
Keep it in mind as you continue your self-employment and you’ll have a much easier time verifying your financial situation.
Do you need more help managing money or handling big financial issues as a self–employed mom?
If so, we’ve got lots of helpful articles you might want to check out. Give some of our finance-related articles a read today!