Documents That Act as Proof of Income for Self-Employment Cases
According to statistics, there is the need to know that about a third of the population workforce engage in some self-employment. It is important to know that the self-employed persons need proof of income and it usually requires different forms of documentation. In that situation, one require to think outside the normal to come up with a proof of making the income. The proof if income is a document that shows that you are able to pay for certain products and services that you need for your life. You need to come up with documents that prove that you can pay your loan, insurance, tax, rent and mortgage agreements.
There is the need to know that for those people who are employed, it will not be hard to prove a source of income as they only need a letter from their employer. However, when it comes to self-employed, it is crucial to understand that you need to come up with your proof. One thing that you need to know as a self-employed person, there are a number of records that you can use as a proof. There is the need to ensure that you keep a good record of whatever you do in your business for the sake of easy access to information when you need it. There are several documents as discussed below that can be used to come up with a proof of income.
To begin with; you need to ensure that you keep the business profit and loss statements. When you have a profit and loss statement; it is essential to know that you can prove that you make a living. The document shows all your earnings and expenses for a specified time. With the document, you will have a list of the income, expenses, profit or losses, business name as well as the period it was recorded.
The other important document that you need to have are the bank statements. A bank statement will help to supplement the profit and loss statement. You need to know that the bank statements will work best especially if your business accounts are separate from your personal accounts. When printed, the bank statement will prove that your business is making profits.
One can also choose to go for the tax documents. Tax documents show statements of wages and previous tax statements, and you can use it to prove that you have an income. In that case, it is crucial to ensure that you keep your 1099 forms.
It is important to know that when you have all the above documents, you can prove that you have an income. A pay stub, however, will save you all these effort to keep the documents and all you need is a pay stub generator