How to Prove Your Self-Employed Freelance Income


what people mean when they request proof of income, why you should provide it, and the various forms of documentation that will help you navigate any situation in which you need to demonstrate self-employed income.

Together, we will eliminate the half-concerned expression on your mortgage broker’s face, as you are so well-prepared!

What is revenue verification?

“Proof of income” simply refers to official verification in the form of documentation that you earn the claimed amount of money. Anyone who may ask you for money on a recurring basis for any form of payment will want to ensure you can make those payments.

It makes logic. If someone lends you money, rents you their home, or does something similar, they are taking a risk on you. When you can demonstrate self-employed income, the perceived risk is reduced, and everyone feels better and is more inclined to open their wallets.

As a freelancer, I have been asked for proof of income when applying for health insurance, before signing a lease, at car dealerships, when setting up our utilities, on credit card applications, and when purchasing our first home.

Sometimes I am met with resistance, and other times people attempt to use my husband’s (who is a traditional W2 employee) income instead. In certain circumstances, I have chosen to do that, but it never rests well with me. There is no reason why I should not be able to obtain a loan in my own name, as I am gainfully employed and earn a respectable salary.

I have instead learned how to navigate money, banking, lending, and the like from the perspective of a self-employed individual. And I now encounter trouble infrequently.

If you have the option, it will always be simpler (or at least for the foreseeable future) to rely on W2 income. But knowing how to prove income from self-employment empowers you to take command of your own situation and finances.

Next time you want to enhance your life in any way—financing a large purchase, moving to a new residence, applying for insurance, obtaining a travel visa, or joining a country club you will have all the resources necessary to make it happen.

How to prove income from self-employment with these six documents

As soon as you are requested to provide evidence of your self-employed income, you may experience a brief moment of internal panic. You likely do not have the pay slips that the majority of applicants simply produce to pass the first hurdle.

However, anyone who tells you that pay stubs are the only method to demonstrate consistent income is either extremely ignorant or unwilling to deal with alternative options. There are truly a variety of straightforward ways to demonstrate income from self-employment. Let’s go over some of the most common methods for proving income from self-employment, so you know what will work for you and how to obtain the necessary documents.

Bank Statements

True, you can demonstrate self-employment income by submitting bak statements. Depending on the type of loan or other program for which you are applying, most institutions will be able to average your income and provide you with terms based on this information if you have had consistent deposits for at least three to six months.

Having a separate business bank account for your freelance income makes this task significantly simpler. Thus, every transaction will be related to your work, and you can simply print and provide several months’ worth of statements.

If you use your personal account for work, you must highlight all income deposits so that the other party can easily identify the funds you receive for your business. You may also be required to provide additional evidence that this is, in fact, income.

Tax Returns

If you have been self-employed for at least two years, your tax returns are likely the easiest method to demonstrate your income. In some instances, banks or landlords that are part of a large corporation may be able to retrieve these records on their own.

Your tax returns will indicate that you are self-employed and have maintained a stable annual income if they are filed correctly and all calculations are accurate. Your income will likely fluctuate from year to year, but as long as you have had a sufficient income for multiple years to qualify for the service you are interested in, you should be fine.

Obviously, if you are not filing your taxes correctly or if you have a large number of business expenses that make your overall income appear low, your tax returns will not accurately reflect your earnings, so keep this in mind. A distinct method of proving self-employment may be more appropriate.


In my experience, not all clients file a 1099; it depends on the size of the company you do work for, the amount you bill them annually, and whether or not they comprehend the nuances of contracting. (Aside: you must still pay taxes on your income, even if your client does not disclose it!)

But if most or all of your clients submit a 1099 and you’ve worked as a freelancer for at least two years, 1099s are an excellent way to prove self-employed income.

A 1099 Form is a formal tax document that details the annual payment received from each client. These forms are submitted to the IRS, and taxes must be paid on the income reported. Using these documents and totaling their amounts provides a clear picture of your annual income.


To be explicit at the outset: I do not believe a mortgage broker would accept your personal invoices as income documentation for a $500,000 loan.

However, if you are having trouble proving self-employed income for purposes such as renting an apartment from a sole proprietor landlord or applying for government benefits, or if you need to supplement another form of documentation, your business invoices are a useful tool.

Invoices are most effective when they are uniform and official. If you use a program such as QuickBooks, Wave, Bonsai, Honeybook, or one of the other excellent freelance invoicing software programs that are available, you will have clear records and printable invoices that can be used as income proof.

Even if your invoices are simply an Excel spreadsheet, number them and include your company’s logo. This imparts credibility to your earnings when they are required for any reason.

Pay Stubs

Wait, independent contractors don’t have pay receipts, right?

In fact, if you properly organize your business, you can have pay stubs, and your days of pondering how to prove self-employed income will be over!

When you have a business bank account and deposit all revenue into it, you can then pay yourself a salary.

A valid pay stub must display both total and net income, which requires the calculation of Medicare, Social Security, and state and federal tax withholdings. This model doesn’t work for everyone, but if your freelance business grows large enough, using a formal pay receipt can help you overcome a number of legal obstacles, so you should consider it.

Software Accounting Statements

Again, it will always be simpler to figure out how to prove self-employed income if you use an organized system.

Good accounting software, such as Hectic, Bonsai, or Lili, can monitor profits, losses, expenses, etc., and generate reports based on these numbers. In some instances, this report can be used as the sole source of proof of income, or to supplement other documents such as a bank statement.

How to demonstrate self-employment income remitted in cash

In most cases, the documents outlined above will suffice, but what if your clients prefer to pay you in cash? You would not be the first person to ponder how to prove income from self-employment without a digital or paper trail.

To begin, let me say this. If your customers insist on paying you in cash…I would be hesitant to accept them as consumers. It is not illegal to be paid in currency, but there are very few valid reasons for a person to need or even desire this.

Payments in cash are still considered income and must be reported to the IRS. Occasionally, employers pay contractors in cash to avoid documentation and potential tax liabilities. Cash payments make it more difficult for everyone to maintain accurate records. This does not imply that your client is dishonest, but it warrants a second look.

However, if you are working for family or acquaintances, or for a small organization that, for some inexplicable reason, has not yet established a bank account and must pay you in cash, and you are comfortable with the situation, then you should accept cash payment. If you are paid in cash, you can still use those payments as proof of income.

In these situations, the first step is to ensure that your bookkeeping is accurate. Every cash transaction should be recorded with the date. Second, deposit the cash promptly into your bank account. This provides a formal record of the payment.

Now that you have a bank statement and bookkeeping records, the next time you are unsure of how to prove self-employed income, the evidence is right in front of you.

If the majority of your business transactions are conducted in cash, you should establish a legal LLC or sole proprietorship with a bank account and pay yourself a salary with pay receipts. This can assist not only with proving self-employed income, but also with avoiding many tax season headaches.

Start planning!

Freelancers and other self-employed employees will likely continue to be viewed with suspicion by financial professionals for a very long time. Inconsistent income and sloppy recordkeeping are a recipe for disaster when it comes to proving self-employed income.

But it doesn’t have to be like this!

Being a freelancer is no excuse for disorganized business practices. In fact, operating for yourself requires you to care more than anyone else about the appearance of your business records. You don’t want to make costly errors or encounter problems when applying for a loan or filing your taxes.

When you keep meticulous records, you will have access to all the documentation necessary to demonstrate your income as a self-employed worker.

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