Hair stylists and other self-care professionals know that managing schedules, building client relationships, and providing top-notch services are all part of the daily grind. But there's another important element of the day-to-day that tends to go unnoticed: proving your income. 

Whether you're leasing a new studio, applying for a loan, opening a retirement account, or simply filing your taxes, having a reliable way to show proof of income isn't just a good idea - it's an absolute must.

But what is proof of income, and how do hair stylists show proof of income, exactly? We'll cover it all here. 

What is Proof of Income?

When someone asks for proof of income, they're basically looking for evidence that shows how much money you make. It can be any sort of documentation that verifies your earnings over a certain period. 

So, what exactly can serve as proof of income? It could be pay stubs from your job, showing how much you earn before taxes are taken out. If you're self-employed or freelance, it might be a bit different and could include federal tax returns, profit and loss statements, and bank statements.

Why is proof of income necessary, you may ask? It's not just a bureaucratic necessity, even though it might seem like it at times. 

Instead, proof of income is a key element for assessing your financial stability as a business owner. It can impact your ability to file taxes, obtain health insurance, apply for credit cards, lease apartments, finance cars, and even get a mortgage.

3 Reasons Why Proof of Income Matters

A large percentage of professionals in this industry are self-employeed and find it challenging to prove their income when needed. You don't necessarily get a self-employed pay stub, after all - and your paycheck likely varies from week to week. 

However, understanding and maintaining the right kind of documentation can make a huge difference. That way, you have it ready to go at a moment's notice so you don't find yourself scrambling.

Why do you need to know how to prove income? Here are a few compelling reasons:

1. Securing Business Loans

One of the main reasons to have proof of income is to secure business loans. If you're looking to expand your self-care business - whether it’s opening a new massage studio, upgrading your gym equipment, or renovating your hair salon - lenders will require proof of a stable income. 

Showing consistent earnings through federal tax returns or profit and loss statements can enhance your credibility and increase your chances of getting the loan.

Curious about what else is required to get a loan so you can grow your business? Check out GlossGenius' loans feature to learn more about our small business loans ranging from $1,000 to $250,000. 

2. Building Trust with Landlords

Leasing a location for your self-care business is another scenario where proof of income is vital. 

As would be the case if you were renting any other kind of property, your landlord will need some assurance that you can meet the monthly rental obligations. Showing them your bank statements or quarterly tax estimates can build that trust and make it easier for you to secure a prime location.

3. Leasing Specialized Equipment for Your Business

In this industry, specialized equipment is often necessary - and often, it doesn't come cheap. 

Leasing this equipment can be a good option, but you'll have to pass muster in order to do it. Whether it’s high-end esthetician tools, salon lights, or gym equipment, leasing companies will want to see proof of income to know you'll be able to make your payments. 

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5 Ways To Show Proof Of Income As A Self-Care Professional

So how do hair stylists, estheticians, nail artists, and others industry professionals show proof of income? There are a few different ways. Feel free to choose the one that works best for you and the way you run your business. 

In some cases, you might need to supply more than one of these to showcase your proof of income, or you may need to provide supplemental documents, like letters from clients. The goal is to paint a clear picture of your financial situation for the party requesting the information.

If you're ever unsure about what types of proof of income documents to use, don't hesitate to reach out to the person or organization requesting them. They can guide you on the specific requirements and help you gather the necessary paperwork to meet their criteria.

1. Federal Tax Return Documents

One of the most straightforward ways to prove your income is through federal tax returns. These documents provide a comprehensive overview of your earnings and are universally accepted by lenders, landlords, and other entities. 

Including 1099 forms, which report various types of income you received throughout the year, can further substantiate your earnings and provide additional context for the people who might be reviewing your applications or background.

2. Profit and Loss Statements

Creating detailed profit and loss statements is another reliable method. These documents summarize your business income and expenses, providing a clear picture of your financial health. Many accounting software programs can help you generate these statements easily, so you shouldn't have to stress too much.

3. Quarterly Tax Estimate Documents

If you’re self-employed, paying quarterly estimated taxes is a common practice to help you avoid penalties and hefty tax bills at the end of the year. 

These proof of income documents can do a great job of showing that you are financially disciplined and responsible.

4. Bank Statements

Bank statements provide a snapshot of your cash flow, reflecting both personal and business transactions. They can also be great proof of income examples.

Regular deposits that align with your earnings can act as proof of income, but you'll need to be careful about distinguishing your personal expenses from your business ones. Maintaining clear and organized bank statements will help you provide the most accurate information when needed.

5. Clients' Invoices from the Self-Care Business Services 

Invoices issued to clients can also serve as excellent proof of income examples. They reflect the services provided and the payments received, offering a direct link to your earnings. Make sure you keep copies of all invoices for record-keeping purposes.

If you’re running your own business and don't have traditional pay stubs, you can create them for yourself. Include details like gross pay, deductions (such as social security), and net pay. There are various online tools available to help you generate a professional-looking self-employed pay stub that can be used as proof of income.

In certain cases, if you have ongoing contracts or agreements with clients - and depending on what you need the proof of income for - you may be able to use those as a hair stylist proof of income, too.

That's because these documents show a commitment from your clients to pay for your services over a specified period of time. Contracts can be particularly useful if they include payment schedules and amounts, as they'll provide a crystal clear idea of future anticipated income. 

Again, just make sure you keep these documents organized and readily available for when you need to access them.

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Simplify Your Finances & Taxes with GlossGenius

There's a good chance that you didn't get into the line of work you're in because you love doing taxes and managing expenses. You want to style hair, manicure nails, or offer other services to help your customers look and feel amazing.

Unfortunately, however, managing expenses and being able to show proof of income is all part of the game. 

Hopefully, this breakdown of what proof of income is and how you can demonstrate it has made your life a little less stressful, but if you still need some extra support and are wondering, "how do hair stylists show proof of income with everything else we have to get done in a day?" - don't sweat it. 

GlossGenius offers an all-in-one business management solution that's uniquely tailored to the self-care industry. With features like finances and reports & analytics, you can streamline your financial processes and keep your documentation as organized as possible.

GlossGenius makes it incredibly easy to track your earnings, generate profit and loss statements, and manage your expenses. Plus, our tax resource center provides valuable insights and tips to help you stay compliant with tax regulations. 

‍Visit the GlossGenius website today to learn more about our services - and sign up for your free trial. Our tools are designed to simplify your business management, so you can focus on what you do best - making the world look (and feel) its very best.

FAQ

How to show proof of income without pay stubs?

If you don't have traditional pay stubs as a self-employed hair stylist, you can use federal tax returns, profit and loss statements, bank statements, and clients' invoices as alternative forms of proof of income. 

How do I prove income if I’m self-employed?

When it comes to how to prove income when self-employed, you can use a variety of documents to prove income, including federal tax returns, profit and loss statements, quarterly tax estimate documents, bank statements, and clients' invoices.

How to prove income if I’m paid in cash?

If you receive cash payments, it might be tempting to not record these and avoid the tax obligations. However, you need to keep detailed records of each transaction not only to keep in line with the letter of the law but also to help you show proof of income when you need it later on.