There are a lot of pieces of paper you need to keep safe, no matter where you are or how many times you move. These can include your social security card, your birth certificate, and your passport. However, there are a lot of other financial documents you need to keep safe because you will need them to stay compliant with the law, and here’s a list of some of the most important ones.
You might need these documents when tax season rolls around, or to support certain phases of your life, such as when you choose to retire.
1. Tax Records
You should keep all of your tax records for at least seven years after you receive them. While the IRS can audit you, and their statute of limitations is three years, there are circumstances that can bring the audit back for the last six or seven years. Make sure you have your tax returns that go up to the statutes of limitations inside of your state.
You should also hang onto W-2 tax forms and 1099 forms, as well as any other forms that are designed to verify the information on your taxes for at least seven years.
Paystubs are able to provide detailed information about the paychecks you are getting from an employer. It lists the pay period, the date you were paid, the number of your gross earnings as well as the deductions taken from the pay, and other information. If you are moving to a new apartment, seeking a loan, or even seeking to prove that you have employment in a paying position, then a paystub might be the proof that people need.
You should keep paystubs or you can also use a paystub generator, and paystubs should be kept for about one year. These paystubs, as well as receipts, can be very helpful as you move through life and need to provide proof of income. However, you should only keep these paystubs for about one year, and should always keep the paystubs from your current job over any others.
3. Profit And Loss (P&L) Statement
If you find that you are owning a small business, then one of the first important financial documents you need to keep is a profit and loss statement. This statement shows the profit and revenue you made as well as the expenses your business spent over a period of time. Not only can analyzing your profit and loss statements help you see what your business is doing in terms of money, but it can also be a way to show a big picture financial statement of your business as well.
How Do You Replace These Important Finacial Documents?
Of course, accidents happen and some of these documents are thrown away or damaged beyond repair. Or fires, floods, and other natural disasters can lead to the destruction of these documents. Thankfully, many of these documents can be replaced by going online and finding the electronic copies, or by creating electronic copies yourself.
For Paystubs, you might need to wait for your next payment period, but tax records can be found online. If you own your small business, you should also have an electronic copy of your profit and loss statement as well. Not only can it help in the case of disaster, you can also see a lot of profit and loss statements electronically all at once to see how your business is doing.
All of these financial documents are very important to your life, and you should keep them safe because you don’t want to be digging through piles of paper whenever you need to find them!
Published by HOLR Magazine.