In the world distraught with the Coronavirus, online businesses and services are reaping the benefits of everyone being at home. That includes freelancers and all the wonderful work they do.
Freelancers are steadily increasing in the American workforce. The US Bureau of Labor Statistics projects the number of freelancers in the workforce to hit 10.3 million by 2026.
However, when you need to obtain loans, mortgages, or insurance, you need proof of your income. Most people use their other documents like W-2 forms, but because they are self-employed, freelancers do not have the same documentation.
So do freelancers need pay stubs?
Here are some methods you can use as a freelancer to prove your (monetary) worth.
Methods to Monetary Madness
It may seem like a lot to do, but it’s not impossible. There are several ways you can show proof of your income.
Keep and Show Your Bank Statements
This one way to be able to prove your income. Now, this may not be the easiest in terms of privacy, but if you’re trying to get a new car or new house, you will probably consider this one to be a possibility.
It gives creditors/banks an idea of your income and your cash flow over a period of time and can solidify claims to what may be making in terms of income.
Show Your Tax Returns
Using your tax returns as proof can be a double-edged sword: on the one side, these are often required by banks to prove your income bracket. So if you have healthy tax returns, you’re in a good spot.
On the other side though, most freelancers have the notorious habit of trying to decrease their income taxes as much as possible. If your tax returns reflect this, you will most likely be denied for not having enough funds to afford a mortgage.
Create Your Own Paystub
There is always the most direct approach, creating your own paystub. This may seem overwhelming because it is certainly tedious work. But you can act as your own “boss” by creating this.
Using a pay stubs template, you can show proof of your salary as well as business expenses using the paystub you create. Do not forget to be thorough, the last thing you want is an error and you have to get authorities involved.
The IRS does not play when it comes to money, and neither should you.
Do Freelancers Need Pay Stubs?
As a freelancer, keeping track of income and expenses can be tedious, but it is necessary. Do freelancers need pay stubs? Not always, and there are some creative ways to get around them.
And there are several more ways than just these listed that you can show your proof of income. Be sure to see what best fits your situation.
But you should get into this ever-increasing profession. Being a freelancer allows you freedom, no pun intended, to work when and how you see fit.
And with so many businesses focusing on their online presence, its easier than ever to make it happen. Who doesn’t like that kind of liberty?