Providing ‘Proof of Income’ As a Freelancer

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As a freelancer, you are a regular person who wants to sign leases, buy homes, and take out loans.

You don’t want to be placed in this particular box where you cannot realize the fruits of your labor as an individual adult. Although self-employed individuals, like freelancers, are treated differently throughout the loan approval process, there is no reason why you can’t have the home of your dreams by providing accurate, concrete proof of income.

Typical loan approval processes will ask for your W2s and letters from your employers. For some reason, our society thinks this is a more reliable form of income than working for yourself. Although we all know that is false, it’s a relatively simple and easy process for an employed person, which is why you are probably worrying about the experience for yourself as a self-employed person. 

We will go over how you can overcome any stigma against a freelancer when proving your income. All it requires is a little prep work and some patience. Let’s check it out below:

Gathering Your Concrete Proof of Income

Income Taxes

When it comes time to prove to the lender that you can repay the loan or rental payment in full, start with your income taxes. Income taxes are an acceptable form of income since they list every dollar and expense incurred in the previous calendar year. They will typically want to see your returns from the last 2-3 years to confirm that the income is reliable and not just a ‘fluke.’ Note: the larger the loan or, the more expensive the rent, the more they are going to want to see. If you consider buying a home or investing in a significant expense, they will want to see as detailed of a return as possible. 

Consider a professional service or using a CPA in this case to prep your return, so it answers all of their questions. The cost to hire a CPA is well worth the money you will receive in savings from both the reported tax liability in addition to proof of income.


Instead of providing a pay stub or W2, you can submit 1099 as proof of income. If you make your money through one-off sales, be sure to keep documented evidence of every dollar that you make throughout the year with receipts. Using software like Continuum makes it easy to track this information without having to write it down. Many lenders will be satisfied if you can list the total annual income and point to the breakdown of 1099s that amounted to the number on your tax return. They see it as ‘real proof’ of what you earn.

Bank Account Statements

There’s nothing quite like providing lenders with screenshots of your bank account’s ins and outs over the year. Bank accounts can serve as proof of assets, as well as proof of income. If you receive a regular payment from a client, each deposit will be inside the bank account. Be sure to list out all of your bank accounts so that the lender can see the whole picture. They will want to see a few months of bank account statements leading up to the point of the big purchase. If you recently made another big purchase that may impact your bank account amount, be sure to let the lender know that. Let them know about any retirement and investment accounts as well – they may want to see those statements, too.

Online Payments

If you are freelancing online, the odds are that a fair amount of your funds are coming in through Venmo, PayPal, or freelancing software, like Continuum. These sites can provide a detailed snapshot of the money coming in and out of your business every week. These statements can be downloaded, printed, and then used to prove all income earned for a particular period. Even though you don’t make all of your money this way, you will be able to demonstrate at least part of your income without any question. 

Profit and Loss Statements

A profit and loss statement is not required if you are a freelancer. However, having one compiled can make your financial life much easier every year when you present it to lenders. Tracking your income and business expenses is a smart way to do business while also showing profitability. It’s an all-in-one document that will put any concerns to bed.

Know That You Are Not Alone

As of 2019, nearly 41.1 million Americans were freelancing in some capacity, which means that you are not alone in proving your income with this arrangement. Whereas 10-years ago, a lender may have been skeptical about this form of business, now, in 2021, you are in comfortable hands with how you choose to do business.

To save yourself some time and frustration, have all of these documents already compiled in a folder before you go ahead with signing an apartment. It will be as easy as a few clicks to get the information over so you can proceed with your loan or purchase. 

Not to mention, having the majority of these documents handy will make doing your taxes each year that much easier. These are documents that a CPA would want to see from you as well to prep your taxes.

It may not be exciting and fun, but it’s an intelligent way to do business.

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