As tax season approaches, it's essential to understand how to dispose of your tax records properly. Tax documents contain sensitive personal and financial information, making them a prime target for identity theft. Therefore, knowing when to shred tax records and how to do so properly.Â
How Long Should You Keep Tax Records?
The general rule of thumb is to keep your tax records for at least three years after the filing deadline. This is because the IRS typically has three years from the date you filed your return (or the due date if you filed late) to audit your tax return and assess any additional tax due. However, there are exceptions to this rule. For example, if you failed to file a tax return or filed a fraudulent return, the IRS can audit you at any time. In this case, you should keep your tax records indefinitely to protect yourself from any potential legal or financial issues that may arise in the future. Additionally, if you claim a loss from worthless securities, you should keep your tax records for seven years. In this case, the IRS may take longer to assess a tax liability, so keeping your records for a more extended period is essential. It's also important to note that states may have different rules regarding how long you should keep your tax records. For example, some states may require you to keep your records longer than the IRS. Therefore, it's crucial to research your state's requirements to ensure you're keeping your documents for the appropriate length.How To Dispose of Tax Records Properly?
A professional shredding service is an ideal solution for those with many tax records that need to be disposed of securely. These services use specialized equipment to shred documents into tiny pieces, ensuring that identity thieves cannot reconstruct or use sensitive information. Here's how a professional shredding service deals with tax records:- Collection: The first step in the process is collecting the tax records from the client. A professional shredding service can pick up the documents directly from your location, making the process convenient and hassle-free.
- Secure transport: Once the documents are collected, they are transported to the shredding facility in a secure vehicle. The shredding company ensures that the documents are transported securely and confidentially, with strict chain of custody procedures to maintain security throughout the process.
- Shredding: The tax records are then shredded using specialized equipment like cross-cut shredders that turn the documents into tiny pieces, making it impossible for anyone to reconstruct them.
- Certification: After the shredding is complete, the company provides a certificate of destruction to the client, confirming that the documents have been securely destroyed and that they were completed per industry standards and regulations.
