Being self-employed has its perks; you get to work from home at whatever hours you wish. You don’t have to answer to anybody since you’re your own boss. You get to travel wherever you want and still make some money.
But there are some downsides, such as having to jump through legal hoops. One such hoop is providing proof of self-employment.
But don’t worry; in this article, you’ll find out some simple and easy ways to provide proof of income so you can continue enjoying the self-employed life.
Submit Your Tax Returns
This should be the primary way you show proof of self-employment. Since you have to file every year (even if you haven’t made any money), you’ll have years of records on hand.
For legal situations, most, if not all entities will accept federal tax returns as acceptable proof of self-employment. To make things simple for yourself, you should plan to use your tax returns as documentation whenever possible.
Show Your 1099-MISC Form
If you’ve earned over $600 with any client, they’re legally required to provide you with a 1099-MISC form. When you receive it, you can make copies and use it as proof that you’re self-employed.
The 1099-MISC form can be the easiest way to prove your self-employment since there’s no work on your part to get it. However, if you earn under $600 with any client, you’ll have to find other ways to provide self-employment documentation.
Print Out Your Bank Statements
Online banking makes this very easy to do. Go to your statements and select the time period you want to generate a statement from. It’ll show every transaction, including credits and debits. Simply select the option for “credits” and it’ll show all the deposits made into your bank account.
If you only have one client, you can also input their name and it’ll generate a statement with just the payments your client’s made to you.
Create A Pay Stub
There are many online tools available for you to create a pay stub, which would prove you’ve provided services to a client. While traditional pay stubs usually serve employees, you can now create pay stubs geared towards contractors too. This website has the option to create an easy contractor pay stub so you can have proof of self-employment.
Get Proof Of Self Employment Easily
The next time someone asks you for proof of self-employment, you have several ways of generating documentation. Depending on the resources available to you and how much you earn, there may be some methods that are easier than others for you.
Now that you have the knowledge, you can determine what the best course of action is for you to submit proof of income whenever you’re asked.
Want to purchase a home soon as a freelancer? Then check out our blog article.