Keeping track of document shredding and retention periods might feel like a full-time job in and of itself. So, which documents should be shredded, and when should they be shredded?
While the nature of your organization may differ, certain documents must be shredded for your own security. For the time being, we’ll focus on five types of documents that should be high on your priority list.
Utility and credit card bills
Credit card statements and utility bills should be at the top of everyone’s shredding list. Bills of this kind usually contain a lot of sensitive information. So, once payment has been confirmed and you no longer need to refer to that bill, make sure to trash the document.
Even if it’s tempting to save those kinds of bills after they’ve been paid and resolved, the simplest approach to prevent identity theft from those records is to burn them. If these bills are important to your tax returns, however, the shredding guidelines listed below apply.
It is suggested that you keep bank statements for a year before shredding them. Pay stubs are the same way. These are documents that contain the type of sensitive financial information that identity thieves seek.
If you want to receive your bank statements or invoices online, you’ll want to be sure your company is turning paperless safely.
The I-9 tax forms confirm an employee’s identity and must be retained for either three years or one year after an employee’s termination, whichever is the longer period of time, which is usually three years. These documents include all of the information required to steal someone’s identity and must be securely destroyed.
Forms W-2 and W-4
After hanging onto W-2 and W-4 paperwork for four years, you should securely burn them. These are personnel documents with highly sensitive information including social security numbers and tax ID codes.
Because you can modify a tax return within that time frame, a firm should keep tax records for three years. The standard period is seven years since the IRS would require that information before you could securely destroy these papers if you were audited.
Why isn’t shredding a good idea?
You shred your documents to protect your personal information and prevent identity theft. Your paper shredding machine, on the other hand, does not provide the most secure approach for entirely eliminating confidential data. Many paper shredders shred documents into strips rather than particles, which can then be rebuilt.
Likewise, relying on your staff to select what to shred and when to destroy poses a significant security risk. Documents that are not destroyed on time or thrown into a recycling bin in their whole may fall into the hands of a thief or rival.
These security threats are simple to eliminate. Shredding and disposal organizations who are NAID AAA Certified are subject to severe standards, processes, and unannounced audits to ensure compliance. The following areas are evaluated during the audit process:
- Policies and procedures relating to security
- Equipment and facilities for document destruction
- Hiring and screening procedures for employees
- Processes involving the chain of custody
Furthermore, when your papers are shred by an NAID AAA Certified firm, you may rest assured that they will be destroyed in accordance with state and federal information privacy standards.
Is it a good idea for me to shred anything with my address on it?
“Even if you think it’s junk mail, you should never rip up or shred someone else’s letter,” Evans adds. “All you have to do is write’return to sender’ or ‘not at this address’ on it and put it back in your mailbox.”
While we’re on the subject of other people’s mail, Evans advises keeping a check on what your children get, as fraudsters can use school paperwork and other documents to take their identities.
What should be shredded and why?
- Junk mail and magazine address labels
- Copies of birth certificates
- Checks that have been canceled or invalidated
- Bills from credit and debit cards, carbon copies, summaries, and receipts
- Credit histories and reports
- Pay stubs for employees
- Employment history
- Driver’s licenses, college IDs, military IDs, employee badges, medical insurance cards, and other expired credit and identification cards (If your shredder won’t handle plastic, chop cards up with scissors before throwing them away.)
- Passports and visas that have expired
- Certificates of insurance
- Investing, stock trading, and real estate transactions
- Records of medical and dental care
- Documents containing a Social Security number
- Credit card applications that have been pre-approved
- Receipts with account numbers from a checking account
- Curriculum vitae or resums
- Signatures are needed to complete the transaction (such as those found on leases, contracts, letters)
- Routes of travel
- Airline tickets that have been used
- Bills for utilities (telephone, gas, electric, water, cable TV, Internet)
What should you refrain from shredding?
Here are five categories of documents that should not be shredded and should instead be kept.
- Returns and receipts for business income taxes. Keep track of your business’s tax returns.
- Personal information on employees and clients.
- Property records for businesses.
- Checks that have been cancelled, bank statements, and credit card statements.
- Financial records.
STATEMENTS:
In general, you should maintain a digital or print copy of your monthly bank and credit card statements for the previous year. The protocol for shredding papers like statements, on the other hand, differs by financial institution. Find out more in the sections below.
Credit card statements: Unless evidence of purchase is necessary for warranty or tax purposes, these statements can be shredded once they have been inspected for mistakes. Keep these statements safe until you’ve double-checked the charges and have confirmation of payment. You should keep them for three years if you need them for tax deductions.
Bank statements should be reviewed and stored every month for year-end accounting purposes. Documents can be shredded once taxes are filed, and your banking institution should be immediately available if needed. If your bank provides online statements, you can opt to receive your bank documents digitally instead of receiving them on paper.
Investment statements should be kept on file for the annual valuation until the end of the year. Keep the document for at least three years, as you may need it for capital gains tax purposes. When you sell stocks or properties, records like these help you keep track of your cost basis and the taxes you owe. You can trash your monthly and quarterly statements once you receive the annual summaries and your taxes have been filed.
VOUCHERS:
These documents contain any information you could need to defend yourself against potential litigation in the future. We’ll also cover important but frequently neglected details like how long a landlord should preserve old leases.
Investment acquisition: Documentation should be retained as a purchase record and should only be deleted after taxes are sold and submitted.
Landlords must know how long to preserve papers such as leases in their possession. Keep these papers in a safe place until the conclusion of the mortgage or lease term.
Payroll documentation: Because this sort of document contains a lot of important information, it should be saved as soon as it is received. Pay stubs can be shredded after they’ve been checked to employer data at the end of the year. Keep your pay stubs as well, so you may use them to double-check the accuracy of your Form W-2 when tax season approaches.
Manuals and warranties should be kept for the duration of the ownership period and then shredded.
Keep only the receipts you need for tax purposes and shred the rest. Nonetheless, you can keep your warranty or return it once it’s been filed.
Tax records: Tax returns and any supporting documents should be kept for at least seven years. Also, maintain your tax records for eight years if you file a claim for a loss due to an erroneous deduction. Before shredding, you might make digital copies of the crucial papers.
BILLS:
Bills are another type of document for which you should know how long to retain them. People often believe that once they have paid their bills, they may throw them away, but this is not the case. Because certain bills have a time limit, you should know how long you should hold them before shredding them.
Utility Bills: Keep these bills for a year and then throw them away. Only if you’re claiming a home office tax deduction are they required to be kept for three years.
You may require tax-related bills for your utility, cell phone, and cable if you own a business. However, as soon as you check that your money has been received, you can delete them. Furthermore, after the confirmation, you can utilize your monthly statement to dispose of bank withdrawal and deposit slips.
Medical Bills: Save your medical bill receipts for a year in case your insurance company asks for proof of a doctor’s visit or other medical claim verification. You can deduct medical expenses if they were more than 7.5 percent of your adjusted gross income in 2017 or 2018.
There have, however, been recent advancements. You can only deduct the amount of unreimbursed eligible medical expenses that exceed 10% of your adjusted gross income for the year. If you want to take advantage of this deduction, you must keep your medical documents for three years, according to tax records.
CONFIDENTIAL INFORMATION:
Any documents containing private information, such as social security cards, should be shredded to ensure that they do not get into the wrong hands.
Insurance policy: Records should be kept in a secure location for the duration of the policy. You may shred as soon as the policy is no longer valid.
Cheques can be shredded or destroyed after a year, depending on your financial institution’s regulations. In other circumstances, if the documents have been documented with your bank, you can shred them with you.
Although knowing how long to store records is crucial, there are some fundamental standards to follow when it comes to documentation. They are as follows:
Procedures For Converting To Digital-based
You don’t have to worry about deciding what to shred and what to save when you use digital records. After you’ve used our chart to determine how long you should store documents, you should complete the following:
The first step is to:
You must make the following preparations:
A safe place to keep it: It’s best to keep it in a folder on a computer system. You can also save a copy of the file to your cloud or an external hard disk. This is the solution we offer because it’s time to go digital and conserve space!
The second step is to:
Create distinct folders for various types of documents, such as certificates, records, and legal documents.
Then scan and file each document in a folder according to its content. To describe it, make sure to give each one a distinct filename so that it can be found quickly using your computer’s search feature.
Several apps are also available to assist you in quickly recording and storing a range of documents. Many can be operated using your smartphone or tablet, so you can get rid of paperwork even if you’re not near your home computer. Your business associates and banks must also be informed of your shift to the digital platform.
To keep your account information safe, use complicated passwords that you change frequently. Make sure your username and password are unique from those you use for personal email, online shopping, or social networking accounts. It’s also a good idea to install antivirus software on your computer. Godspeed!
Is it okay if I reject credit card offers?
Anyone with a mailbox understands the aggravation of receiving junk mail, credit card offers, receipts, and other forms of correspondence. However, when you’re faced with a mound of these documents, it might be difficult to know whether to dump them in the trash or recycle bin.
Receipts, junk mail, and other papers containing sensitive personal information should not be thrown away due to the risk of identity theft. Identity thieves can rummage through your garbage or recycle bin, obtain your personal information, and use it to commit fraud and other crimes against you.
I strongly advise shredding any documents; a cross-cut shredder such as this one would suffice. This is the identical model I have, and it has served me well for several years.
A apparently innocuous piece of paper can put you at danger of identity theft. This post will go through which documents to delete and which to save, as well as how to properly dispose of important documents and other security suggestions.
Is it a good idea to trash outdated credit cards?
Can Credit Cards Be Recycled? Without a doubt, you should shred and discard cards rather than recycling them. While recycling a card prevents it from ending up in a landfill, it does send it to a facility where it is placed on a conveyor belt and sorted by humans.
Is it safe to toss credit card bills in the trash?
Do you have a stack of bank statements dating back several years? You may be ready to get rid of them, but you don’t know how. Is it okay to throw away old bank statements without first shredding them?
To protect oneself from identity theft, the Federal Trade Commission recommends shredding documents holding sensitive information, such as bank statements. To help you decide what to shred and when, follow these tips.
What papers should you save and how long should you keep them?
KEEP FOR 37 YEARS Knowing this, it’s a good idea to keep any document that validates information on your tax return for three to seven years, including Forms W-2 and 1099, bank and brokerage records, tuition payments, and charity donation receipts.
You can use a timetable or timeline to ensure that you stay organized with what records to save and what you should shred after you file your taxes each year.
Compare your pay stubs from the previous year to your W-2s when filing your taxes, and monthly brokerage statements to your 1099s in the same way. Shred the stubs and statements after you’ve filed your return.
Shred old tax return forms, W-2s, 1099s, K-1s, canceled checks, charitable contribution receipts, and other information utilized in previous taxes three years after filing.
While it’s not advised, if you fail to disclose more than 25% of your total income on your tax return, keep those W-2s, 1099s, and other tax paperwork for 6 years in case of an IRS audit.
Shred old tax documents for closed retirement accounts (such as IRAs) and losses from worthless securities or bad debt deductions after 7 years.