How to Show Proof of Income: A Guide for the Self-Employed

proof of income

Last Updated June 24, 2024

Navigating the financial world as a self-employed person can be tricky, especially when it comes to proving your income. Unlike traditional employees who get regular pay stubs, the self-employed need to use various documents to show their earnings. This guide will help you understand what proof of income is, why it’s needed, and how you can demonstrate your earnings as a self-employed individual, all while following United States and IRS guidelines.

What is Proof of Income?

Proof of income is any document that verifies how much money you make. For traditional employees, this is usually a pay stub from their employer. But for the self-employed, it can include several different documents that together give a complete picture of your income.

Why Do You Need Proof of Income?

You might need proof of income for many reasons, especially for important financial decisions or legal requirements. Here are some common scenarios:

Filing Taxes

The IRS requires you to report all your income on your annual tax return. Proof of income ensures you report everything accurately and stay compliant with tax laws.

Getting Health Insurance

When you apply for health insurance, particularly through marketplaces or government programs, you often need to show your income level to determine eligibility and subsidy amounts.

Applying for a Credit Card

Credit card companies want to see proof of income to assess your ability to repay the credit they give you. This helps them decide your credit limit and interest rates.

Leasing an Apartment, House, or Car

Landlords and leasing companies need to verify your income to make sure you can afford the monthly payments.

Financing a Car

When you apply for an auto loan, lenders need proof of income to evaluate your ability to make the loan payments.

Applying for a Mortgage

Mortgage lenders require proof of income to assess your ability to repay the loan over its term. This is a crucial part of the mortgage approval process.

Other Types of Personal Loans

For personal loans, lenders need proof of income to determine how much they can lend you and to set the loan terms.

How to Provide Proof of Income

As a self-employed person, you have several ways to prove your income. Here are the most common methods:

Annual Tax Return (Form 1040)

Your annual tax return is one of the best documents for proving your income. It shows your total income, deductions, and net profit for the year. Form 1040 is the standard form used by U.S. taxpayers to file their annual income tax returns with the IRS.

1099 Forms

If you do freelance or contract work, your clients may give you 1099 forms to report the payments they made to you. These forms are sent to both you and the IRS and provide a detailed account of your earnings from each client.

Bank Statements

Bank statements can show proof of income by detailing your deposits. Regular deposits from clients or customers into your bank account can demonstrate a steady stream of income.

Profit/Loss Statements

A profit and loss (P&L) statement, also known as an income statement, summarizes your revenues, costs, and expenses over a specific period. This document provides a clear picture of your business’s financial performance and profitability.

Self-Employed Pay Stubs

Creating your own pay stubs can be an effective way to proving income. These stubs should detail your earnings, deductions, and net income, similar to those issued by employers to their employees.


Providing proof of income as a self-employed individual might seem challenging, but it’s definitely doable with the right documents. Whether you’re filing taxes, applying for a loan, or leasing a property, having accurate and comprehensive proof of income is crucial. Use your annual tax returns, 1099 forms, bank statements, profit/loss statements, and self-created pay stubs to show your earnings and comply with financial requirements. By understanding and preparing these documents, you can confidently handle the financial aspects of being self-employed.