Ninty-eight percent of businesses in the world today are small businesses.
Many of them only have one employee.
This type of business structure, called self employment, can be difficult to verify for employers, landlords, and others who are checking on an employment history because people can say that they did pretty much anything and claim virtually any salary and make it seem like it is true.
There are a few ways, however, that you can determine if someone is giving you facts or trying to feed you a false narrative.
Here are the easiest ways to verify self employment.
1. Ask For Tax Records.
People who are claiming self employment revenues must file their taxes every year.
Some may even need to file estimated taxes. This will verify that the income being registered is genuine.
As for a copy of tax records for 2-3 years to establish a verifiable history of reliable income.
You don't need to see the entire tax return. Just look at the business income section to determine if what is being reported is real.
Don't accept online copies. These can sometimes be falsified.
2. Ask To See Business Licenses.
Although not every jurisdiction requires a business license for self employment, some of them do.
Not only does this verify the legality of the self employment claims, but you'll get to see how long they've been in business.
Some jurisdictions will even keep a register of complaints as part of the public record.
You won't get a picture of the income, but at least you'll know that the business exists.
3. Ask For Bank Account Records.
If you find someone is uncomfortable giving you their tax returns, then you can ask for their bank records or business books.
There should be some register of incoming revenues and outgoing expenses.
You can then judge how long someone has been working on their own based on how long they've been receiving regular deposits.
Knowing how to verify self employment can help to weed out the falsified applications that maybe coming your way.
Use these steps today and closely examine the data to make sure it is authentic.
If someone won't submit this data, then you will have grounds to deny their application.
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