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Were you aware that pay stubs are some of the best financial documents to have?
Pay stubs are often provided to employees whenever they receive a paycheck. Depending on where a company is located, they may be legally required to provide them. However, many employees are left without pay stubs and must manually produce them.
If you do receive pay stubs from your employer, you should keep them for a variety of reasons. We’ll outline why they’re important so you can start reaping the benefits they bring.
Read on to learn about the importance of holding onto your pay stubs!
Use Them as Proof of Income
One of the main benefits of keeping pay stubs is being able to use them as proof of income. When applying for things like loans, you’ll need to produce several financial documents so the lender can see how much you earn. Pay stubs provide all the info you need, so they’re often better than other financial documents.
If you use something like an online paystub creator, you can make stubs as often as you’d like. Whether you receive them with each paycheck from your employer or earn freelance income, pay stubs will ensure you qualify for loans and rentals.
Make Filing Taxes Easier
Aside from having a pay stub as proof of income, they’ll help you when you need to file taxes. Much of the information you’ll need for tax forms – such as income, expenses, and deductions – will be outlined on a pay stub.
When referencing a pay stub, you can see exactly how much money was deducted for each thing. Federal, state, and local taxes are some of the most common deductions. Depending on where you work, money may also be taken out for a retirement plan.
Organize Your Finances
The ultimate goal of maintaining pay stubs and other financial documents is to simplify organizing finances. While they can help you when applying for things and filing taxes, they’re highly beneficial when creating a budget.
When receiving a pay stub, you can either store it with other financial documents or produce a virtual copy of it. Using both of these methods is best if you’d like to ensure nothing happens to your info.
Using the information on each pay stub, you can put together a budget that’ll help you cover expenses while affording other things. All you must do is calculate how much you’re keeping with each paycheck after deductions.
Start Using Pay Stubs Now
After reading this quick article, you now understand how pay stubs can benefit anyone. Whether you’re self-employed or a W2 employee, keeping each pay stub will ensure you have your finances together whenever you need to do something.
We encourage you to use an online pay stub creator as soon as possible if you don’t receive them from work. You can manually input all the info you need and calculate deductions.
Check out our other articles to learn more about personal finance!