Are you self-employed and wondering what you need to do to show proof of income?
Whether you’re applying for a new apartment or applying for a loan, you’ll need to show proof of income. However, showing proof of income can be a bit more difficult when you’re self-employed, as you likely don’t receive a weekly, consistent paycheck from one company.
So how are you supposed to prove your income?
Check out this guide to learn how to show proof of income when you’re self-employed.
1. Use Your Tax Returns
In some cases, you can use your tax returns to show proof of income. When you file your taxes each year, you get a tax return. This is a legal document that shows all of the money you made in the previous year.
While it won’t show a breakdown of what you’re making each month, it does show a year’s worth of income, and in many instances, this is sufficient.
2. Bank Statements
Another easy way to prove your income is through your bank statements. Oftentimes, landlords and lenders will ask for your three most recent monthly bank statements as proof of income.
Getting a bank statement is easy, and it can typically be done through your bank’s app or online portal. If your income fluctuates each month, you may also want to print a yearly statement to show that you make enough each year to cover rent.
3. Pay Yourself Using Pay Stubs and W-2
Just because you’re self-employed doesn’t mean you can’t set up a regular pay stub system to pay yourself. Instead of filling out a 1099 or getting money sent straight to your bank account, you can pay yourself using a W-2 and generate pay stubs each week or month.
Once you generate these documents, you can show them to your landlord or lender as proof of income. You can also print check stubs templates for independent contractors to show you much you make.
4. Other Documents
There are some other documents you can use to prove your income, including:
- Social Security Documents: If you receive Social Security from the government, you can use these documents as proof of income
- Pension: If your company offers you a pension after retirement, you can also use this to prove your income
- Disability Insurance: Just like Social Security, you can also show your disability insurance documents as proof of income
- Court-Ordered Payments: If you receive alimony or some other type of court-ordered payment, you can use this to prove your income
If you receive unemployment, you can also use your unemployment documents to prove your income. Just keep in mind that because unemployment benefits are temporary, your landlord or lender will likely want to know your future income plans.
Proof of Income: Time to Prove Your Income
Now you know how to show proof of income when you’re self-employed! As you can see, there are many ways you can prove your earnings to your landlord or lender.
Be sure to check back in with our blog for more tips and tricks for the self-employed.