When you freelance to earn money, you are self-employed.
Freelancing typically involves providing services such as graphic design, bookkeeping, writing, tutoring, or Web design for clients.
Many professionals enjoy the ability to earn money with a flexible schedule and the freedom to work from almost anywhere. Although freelancing puts you in charge of your hours and your earnings, it also involves some administrative responsibilities for your own payroll accounting and bookkeeping to ensure that you’re adhering to tax regulations.
You may also face challenges if you need to provide proof of income when self-employed, for housing or loan applications because you won’t have the typical pay stubs that most people accumulate from their employers. If you’re wondering how to prove income without pay stub documentation, read on to learn about some easy and effective ways in which you can procure evidence of income.
What Is Proof of Income?
Proof of income is documentation that shows your earnings.
How to show proof of income? Most people with traditional employment can present proof of income documents by providing copies of pay stubs. Other methods of verifying income include bank statements, copies of federal income tax returns, or tax documents such as W-2s or 1099s.
How else to provide proof of income? Proof of income might also be provided with self-employment ledger documentation, bookkeeping records, or a year-to-date profit and loss statement.
Sometimes, a proof of income letter can be submitted to verify income and employment. This letter might be written by an employer or client, by you as the income-earner, or by an accountant. The letter must include all relevant information to prove income, including weekly hours worked, hourly wage or annual salary, and projections for sustaining or increasing the earnings in the future.
The Need for Proof of Income
Proof of income may be required in a number of circumstances, and it’s often not something you’ll have hours or even days to chase down and provide to whomever is requesting it.
Generally, you should expect to have to prove your income to show your ability to make ongoing payments.
Proof of income is typically required when applying for a loan, when applying for housing, or when applying for a service that will require regular payments. In some cases, you might also need to provide proof of income when applying for subsidized health coverage such as Medicaid or a children’s health insurance program. The bottom line is that you need to be ready to prove your income, even if you don’t expect it to happen soon.
Online Payment Service
For the self-employed, proof of income documentation problems or the issue of not having a pay stub can be resolved by using an online payment service. In fact this option can be chosen by anyone who’s not regularly employed and wondering, “How to get proof of income”, whether they’re freelancers or independent contractors, besides the self-employed individuals.
You can then receive annual or monthly reports of the payments you’ve received.
Download and print the reports to use as proof of income you’ve earned during specific periods. You might not earn all of your income via a single online payment service, but this can be an effective way to prove some of your income to a potential lender or landlord. Therefore it serves as a great proof of income for self-employed and other non-salaried individuals.
Generating a Pay Stub
If you’re wondering how to make proof of income documentation, generating a pay stub is one way. A number of services also enable you to generate a pay stub. Simply fill in the necessary information about the payer, payee, salary, and pay period.
The pay stub generator will perform the required calculations to produce a pay stub, which you can then download and print.
Generating regular freelancer or self-employment pay stubs for yourself makes it easy to track your income and provide proof of your income online at a moment’s notice. All you need to do is work with a partner who can help you with this need, as then you won’t have to worry about learning new software or even understanding what needs to be included on a paystub.
We can help you with that. If proof of income is currently something you cannot provide on an on-request basis, it’s time to provide yourself with that capability and with the resulting peace of mind that you’re ready to move forward with whatever circumstances come your way. Get started today or contact us to learn more.