How Long to Keep Pay Stubs

Whether your old pay stubs reside in a beat-up shoebox under the bed or a pristine file cabinet with meticulously organized tabs, they have at least one thing in common: They take up space.

Of course, a little space is worth it if it buys you some extra security. Holding on to your pay stubs certainly streamlines your tax-filing process, but it can also provide a paper (or digital) trail that's worth much more than its physical weight in sweet, sweet peace of mind. But you don't have to toe the line between "playing it safe" and "total pack rat." Expert recommendations provide plenty of insight into how long to hold on to your pay stubs and when letting go is generally safe.

Keep in mind that the Federal Fair Labor Standards Act doesn't require employers to provide employees with pay stubs, and a handful of states including Alabama, Florida, Georgia, Ohio, Tennessee and others, don't require it either. While most states do impose at least some sort of pay stub requirement, you may have to get in touch with your employer to get pay stubs at all.

TL;DR (Too Long; Didn't Read)

Though there's no hard-and-fast rule for holding on to pay stubs, experts and financial institutions agree that you should keep them for about one-year minimum and roughly six-years maximum.

Recommended Storage Times

There are no rules etched in stone for keeping pay stubs but there are, fortunately, some general rules of thumb. At a minimum, you should hold on to your pay stubs for a year, or at the very least, until you can verify that they match your W-2 with complete accuracy. That's the low end. The maximum, most conservative recommendation is to keep them until there is a little-to-no risk of being audited by the IRS. Unless you're just into financial record-keeping, tax purposes – chiefly safeguarding yourself against actions from the Internal Revenue Service – are the key incentive for hoarding pay stubs in the first place.

Regarding securing your records for a potential audit, take it straight from the horse's mouth; the IRS says, "Generally, the IRS can include returns filed within the last three years in an audit. If we identify a substantial error, we may add additional years. We usually don’t go back more than the last six years." Typically, three years is the limit for errors made in good faith. For the most part, audits six years after the fact only happen when you significantly under-report your income.

The Federal Trade Commission takes a slightly more cavalier approach on pay stubs, advising more toward the low end of storage times. When it comes to your pay stubs, they recommend that you "shred 'em after checking them against your W-2." Of course, certain factors may increase your chance of an audit, such as claiming too many deductions, so it's often a safer bet to hold on to them longer depending on how you file each year. If you're not a W-2 filer, it might just be wiser to keep them until you're well out of audit territory.

How to Store Your Stubs

At least until you've filed your taxes with the IRS (and, ideally, when you're free and clear of audit territory), it's best to keep your pay stubs someplace where even natural disasters can't harm them, such as a fireproof safe. If that's not an option, filing cabinets, document or letterboxes and accordion files do the trick.

But in the era of Google Drive, Amazon EFS and other personal- and business-oriented cloud storage services, cloud-based backups are also a viable storage option. You should make sure the files are password-protected, if possible, or at least private. Good, old-fashioned hard-drive storage is also an option for backups, but not quite as secure or as safe as the cloud due to potential hardware failure. The same goes for keeping backups on a USB flash drive, CD or DVD; consider these backups for extra security, but not necessarily primary storage methods.

When it does come time to get rid of your pay stubs (or other important papers, for that matter), the Federal Trade Commission recommends shredding the documents, just as extra security to prevent potential identity theft. And enjoy the catharsis.

Tracking Down Pay Stubs

No one's perfect. In the likely case that you haven't stored your pay stubs in a fire-proof, industrial-strength, password-protected, iris-scanning safe for the past six years, you may find yourself in a situation where you need to track down copies of old stubs that aren't in your possession. This need might pop up if you live in a state with no legal pay stub requirements, or when you have to provide proof of income or employment, such as when applying for a loan, applying for benefits or buying a new car or home.

This is where your current employer or previous employer can (finally) come in handy. Don't just call their hotline. To track down old pay stubs, you'll want to get in touch with the human resources department as soon as possible, as it may take a few weeks to get copies of the documents. Have your Social Security number, dates of applicable employment and employee I.D. number on-hand when you get in touch. If pay stubs aren't available, ask the HR department for an employer-signed letter (printed on company letterhead) that verifies your year-to-date earnings, or total earnings during your time with the company.

A variety of websites offer the ability to generate your pay stub (for free or for a nominal fee) by merely entering your basic identifying information, pay rate, pay period, exemptions, deductions, rate and so forth. Tempting as they may be to use, be wary of these self-generated pay stubs. Often, lenders will not consider them valid proof of income and, as of 2018, the IRS has not issued a stance on these types of documents.

What About Other Important Papers?

Okay, so you have a pretty good idea of how long to hold on to your pay stubs, but what about all those other important papers?

Consumer Reports recommends organizing your important documents as such: A less-than-a-year file (non-tax-related receipts, current insurance documents), a more-than-a-year file (current loan docs, relevant vehicle titles, paperwork relating to currently held investments, medical files) and a seven-year file (tax filing records, including tax-related receipts for deductions and charitable contributions).

While it seems that everyone has a somewhat varied opinion on how long to keep paperwork, one thing is certain – you should keep vital documents forever. These crucial records include your birth certificate, Social Security card, citizenship papers, family death certificates, marriage license, divorce decrees, custody agreements, valid passports, wills, copies of tax returns, receipts for large purchases and military discharge papers. These documents should be stored securely in a safe. Digital backups are great, but you'll always want physical copies of these important documents.

If you own your home, receipts for home-improvement purchases, expenses incurred buying or selling the property and real-estate-related legal fees should be kept until you sell the house. Financial documents, such as those related to life insurance policies, estate planning and defined benefit plans are ideally stored in a safe deposit box at your bank, with copies doled out to your attorney or executor.

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