Do you have a stack of pay stubs hanging around your home and taking up entirely too much space? If so, you might be wondering how long to keep pay stubs. This is a question that people ask all the time.
They don't want to get rid of their pay stubs too soon, only to find out that they need them later. But they also don't want to have pay stubs sitting around inside their homes for years and years to come.
Generally speaking, it's a good idea to keep your pay stubs for at least a year. That'll give you access to the pay stubs if you ever need them. But it'll also prevent you from hanging on to pay stubs for too long.
Let's take a closer look at why you should resist the urge to throw pay stubs out prior to the one-year mark.
Keeping Pay Stubs Allows You to Check the Accuracy of Your Earnings
Most people don't spend any time looking at the pay stubs they receive from their employers. They check to see that their paychecks are distributed. And as long as they are, they don't give their pay stubs a second thought.
Rather than throwing your pay stubs into a box when you receive them or, worse, throwing them in the trash, use them to check the accuracy of your earnings every week. Your employer might be inadvertently slighting you when it comes to your pay.
At the very least, give your pay stubs a quick glance when you receive them so that you have some idea of where your earnings are going. Your pay stubs will help you see how much money you're paying in taxes, how much you're setting aside for retirement, and more.
Saving Pay Stubs Also Allows You to Provide Proof of Income Later
Are you thinking about renting an apartment or purchasing a car at some point in the near future? You'll probably need to provide proof of your income before you're able to do it. You'll also need proof of income when buying a home, taking out a personal loan, or doing many other things.
While you can usually ask your employer to send you pay stubs if you threw yours out, it's not always possible for them to generate one for you quickly. Keep your pay stubs for at least a year so that you can prove your income at any time.
There's nothing worse than missing out on a great apartment or getting denied for a loan simply because you don't have proof of income. Save your pay stubs to avoid running into this problem.
It Will Come Handy When It's Time to File Your Taxes
Your old pay stubs will allow you to do more than just prove your income if you ever have to do it. It'll also be helpful to have them when tax time rolls around.
Although you don't necessarily need to have pay stubs to pay your taxes, you can reconcile your W-2 forms and check on the social security contributions you made throughout the course of the last year with your pay stubs.
If nothing else, it never hurts to have as much information as possible when you walk into your accountant's office to do your taxes. Your accountant might not need to see your pay stubs. But in the event they do, you'll be glad you have them with you.
Keep Pay Stubs With Your Other Important Financial Information
When storing your pay stubs for a year, keep them alongside the other important financial information you have on hand. Make an effort to keep things like mortgage statements, previous tax returns, any receipts you have for big purchases, and more. Get into the habit of keeping financial records organized. You never know when you might need to access them.
Make Sure You Discard of Physical Pay Stubs Properly
After one year, feel free to discard of your physical pay stubs. At that point, they usually won't be of much use to you or your accountant. Just make sure you take the necessary steps to get rid of your pay stubs properly.
If you have a shredder in your home, use it to shred your pay stubs so that people won't be able to get access to your personal information. If you don't have a shredder, take your pay stubs to a business that supplies shredding services. Your city or town might even offer free shredding to residents at certain times of the year.
This will cut down on the clutter you have in your home while also ensuring that you don't have to deal with identity theft later.
Consider Keeping Digital Copies of Pay Stubs
Would you feel better holding on to your pay stubs for longer than a year rather than throwing them out? It's not usually necessary to keep pay stubs around that long. But if you really want to do it, make digital copies of your pay stubs that you can keep on your computer or on a hard drive.
Digital copies of pay stubs will take up no space at all while allowing you to access them whenever you want. Many employers are even giving their employees the option of receiving digital pay stubs from the beginning as opposed to hard copies that they have to store.
Learning How Long to Keep Pay Stubs Is Very Important
You never want to throw out your pay stubs as soon as you receive them. But you also don't want to keep them for too long and clutter up your home. Knowing how long to keep pay stubs will help you avoid both these scenarios. By hanging on to pay stubs for a year, you'll ensure you have pay stubs when you need them without letting them linger for longer than you have to.
If you're an employer, provide your employees with the pay stubs they need by utilizing a pay stub generator. Your employees will receive the pay stubs they need, and you won't have to pay a fortune for it. Try our pay stub generator tool today to see how easy it is to use!
It's also worthwhile to find out more information regarding the kind of business you can make during recession, preparation for upcoming tax season, and what's going to happen to your tax if you live in one state but working in another state.