Q:

Why should you keep payroll stubs?

A:

Quick Answer

Employees should keep their old pay stubs until they receive their W-2 forms from their employer so they can compare the numbers on the documents. Once they confirm that the W2- statement matches the information on the pay stubs, they can shred the stubs. In the event of a tax audit, the Internal Revenue Service compares the W-2 form with the tax return, so the taxpayer does not need the stubs.

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Full Answer

If the amounts on the pay stubs do not match the W-2 form, the employee should speak with his employer and ask for a W-2c. The employer makes the correction and submits it to the IRS, the state and the employee. This allows the employee to file documents to ensure he receives the right refund or pays the correct amount for his taxes.

If the taxpayer plans to use his refund as the down payment of a car or the deposit on a new apartment, he should keep his last two pay stubs of the year. Lenders and landlords often want proof of income, and having these documents on hand can make the process easier. If the stubs are already shredded, the lender sometimes accepts a bank statement as a proof of income. Even with documentation, some businesses call the employer to verify income.

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