Difference between revisions of "Get Proof of Earnings for a Self Employed Person"
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== Steps == | == Steps == | ||
===Applying for Financing=== | ===Applying for Financing=== | ||
| − | #Know what lenders and creditors are looking for. Creditors will want to make sure you are credit worthy. <ref>https://www.wellsfargo.com/financial-education/credit-management/five-c/</ref> | + | #Know what lenders and creditors are looking for. Creditors will want to make sure you are credit worthy. <ref name="rf1">https://www.wellsfargo.com/financial-education/credit-management/five-c/</ref> |
#*Creditors will want to lend money to a person who has a good credit history. | #*Creditors will want to lend money to a person who has a good credit history. | ||
#*They will want to know what your monthly or yearly income is, as they will want to make sure you can handle your monthly payments. | #*They will want to know what your monthly or yearly income is, as they will want to make sure you can handle your monthly payments. | ||
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#*They will also look into your character, such as past employment and any criminal records. | #*They will also look into your character, such as past employment and any criminal records. | ||
#Know your credit status. You can get a free credit report online to look into your credit. | #Know your credit status. You can get a free credit report online to look into your credit. | ||
| − | #*Keep track of all your accounts, and pay bills on time. <ref>http://www.consumerfinance.gov/askcfpb/311/how-do-i-get-a-copy-of-my-credit-report.html</ref> | + | #*Keep track of all your accounts, and pay bills on time. <ref name="rf2">http://www.consumerfinance.gov/askcfpb/311/how-do-i-get-a-copy-of-my-credit-report.html</ref> |
#*If you have any late payments on your credit report, check into them. If they have been paid, dispute them with the credit agency. | #*If you have any late payments on your credit report, check into them. If they have been paid, dispute them with the credit agency. | ||
#*Make sure you aren't taking on too much debt. You can look at the amount of any revolving debts you have on a credit report. | #*Make sure you aren't taking on too much debt. You can look at the amount of any revolving debts you have on a credit report. | ||
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#*Don't be alarmed if a lender wants more information than asked for an on application. They just want to make sure you are a good candidate for a loan or credit. | #*Don't be alarmed if a lender wants more information than asked for an on application. They just want to make sure you are a good candidate for a loan or credit. | ||
===Providing a Tax Return=== | ===Providing a Tax Return=== | ||
| − | #Make sure you qualify as self-employed. Only certain individuals are classified as self-employed for tax purposes. <ref>http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center</ref> | + | #Make sure you qualify as self-employed. Only certain individuals are classified as self-employed for tax purposes. <ref name="rf3">http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center</ref> |
#*You are considered self-employed if you are the sole proprietor of a business or an independent contractor. | #*You are considered self-employed if you are the sole proprietor of a business or an independent contractor. | ||
#*You can also be part of a partnership that carries on a trade or business. | #*You can also be part of a partnership that carries on a trade or business. | ||
#*If you are otherwise in business for yourself, you are also considered self employed. | #*If you are otherwise in business for yourself, you are also considered self employed. | ||
#*This can include things like babysitting from your home, income from cosmetic sales, taking in roomers or boarders, rental income, profit from swap meet sales, can collecting, or blood/plasma sales. | #*This can include things like babysitting from your home, income from cosmetic sales, taking in roomers or boarders, rental income, profit from swap meet sales, can collecting, or blood/plasma sales. | ||
| − | #File a yearly tax return. You are required by the IRS to submit a federal tax return on all income you earned in a year. <ref | + | #File a yearly tax return. You are required by the IRS to submit a federal tax return on all income you earned in a year. <ref name="rf3" /> |
#*The deadline is April 15th, but typically you can file an extension if you need longer to get together your required documents. | #*The deadline is April 15th, but typically you can file an extension if you need longer to get together your required documents. | ||
#*If you are self employed, you need to use Schedule C or Schedule C-EZ if you are filing a return. | #*If you are self employed, you need to use Schedule C or Schedule C-EZ if you are filing a return. | ||
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#*These can help you document if your business or self-employed income is growing, which will be more attractive to potential creditors. | #*These can help you document if your business or self-employed income is growing, which will be more attractive to potential creditors. | ||
===Providing Copies of Bank Records=== | ===Providing Copies of Bank Records=== | ||
| − | #Save your monthly bank statements. These usually come in the mail or electronically once a month. <ref>https://www.bankofamerica.com/deposits/manage/faq-account-statements.go</ref> | + | #Save your monthly bank statements. These usually come in the mail or electronically once a month. <ref name="rf4">https://www.bankofamerica.com/deposits/manage/faq-account-statements.go</ref> |
#*These will document any deposits you made and any expenses related to self-employment. | #*These will document any deposits you made and any expenses related to self-employment. | ||
#*Try to keep these on file for several months at a time. | #*Try to keep these on file for several months at a time. | ||
#*Make sure you keep your statements for different accounts separate. | #*Make sure you keep your statements for different accounts separate. | ||
#*For example, if you have an account that you mainly make personal purchases out of and a business account, you will want to keep these statements separate. | #*For example, if you have an account that you mainly make personal purchases out of and a business account, you will want to keep these statements separate. | ||
| − | #Visit a branch of your bank to get copies of statements. If you haven't gotten a statement or need copies of the past few months or years of statement, your banker can help you get these. <ref | + | #Visit a branch of your bank to get copies of statements. If you haven't gotten a statement or need copies of the past few months or years of statement, your banker can help you get these. <ref name="rf4" /> |
#*Most banks have these on file electronically for the history of your account. | #*Most banks have these on file electronically for the history of your account. | ||
#*Your bank can either print a statement for you or have one mailed to you. | #*Your bank can either print a statement for you or have one mailed to you. | ||
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#*If you can, provide at least 3 months of statements and deposit receipts. | #*If you can, provide at least 3 months of statements and deposit receipts. | ||
===Providing Other Documentation of Income=== | ===Providing Other Documentation of Income=== | ||
| − | #Consider using a payroll program. If you pay yourself a percentage of profits or regular salary out of your self-employed income or business, you can actually process payroll receipts to yourself.<ref>http://quickbooks.intuit.com/r/money/salary-or-draw-how-to-pay-yourself-as-business-owner/</ref> | + | #Consider using a payroll program. If you pay yourself a percentage of profits or regular salary out of your self-employed income or business, you can actually process payroll receipts to yourself.<ref name="rf5">http://quickbooks.intuit.com/r/money/salary-or-draw-how-to-pay-yourself-as-business-owner/</ref> |
#*These can document how often you are paid and how much. If you are part of a partnership you may consider paying yourself a regular salary rather than drawing on a business account as needed. | #*These can document how often you are paid and how much. If you are part of a partnership you may consider paying yourself a regular salary rather than drawing on a business account as needed. | ||
#*You can write official checks out of a business account into a personal account to show income. | #*You can write official checks out of a business account into a personal account to show income. | ||
