You do have to keep tax records for some time — three to seven years. However, once the retention period expires, you should shred the returns with a document destruction company that offers secure shredding. Your tax returns have a lot of personal information that identity thieves can use to steal your identity, including your social security number, name, address, your dependents, and even your income. Secure shredding is part of data protection, as is shredding old hard drives and other digital media that contain personal information.
Shredding Prevents Tax Identity Theft
Tax documents are goldmines for identity thieves. If you throw them in the trash, even after shredding them with a strip shredder, you can still be a victim of identity theft. Strips are not that difficult to put together. In 2014, according to Fraud.org, the Federal Trade Commission (FTC) received the most complaints about tax identity theft. The FTC estimated that identity theft cost taxpayers about $5.2 billion every year.
Tax identity theft includes using your dependents on the thief’s taxes, and using your name, address and social security number to file taxes to get a refund — if you wait until April to file your taxes. The scammer receives the refund and turns it into cash, which is not traceable. When that happens, the IRS will refuse to process your return, because “you” already filed one.
If you get a letter from the IRS stating that you already filed a tax return and should have received your refund, your identity has been stolen. If you get a letter stating that you didn’t declare all of your income, chances are that a thief used your social security number to get employment. The IRS notices the discrepancy in your claimed income. And, if you don’t make enough to file, but you receive a collections letter, chances are someone is claiming income under your social security number.
To keep your identity safe, practice good tax document shredding — the documents that you no longer need to keep should be shredded as soon as the time to keep them expires.
What Tax Documents Do I Need to Shred Now?
Identity theft protection at any time, but especially during the tax season, begins with managing your confidential information.
- Only keep documents for as long as you need to — until the time the IRS can audit you runs out.
- Always keep your documents secured in a locked filing cabinet or safe.
- Once you no longer need to keep the documents, shred them with a NAID-certified document shredding company.
- If you need to wait a few days once you go through your files, be sure to keep the box with the old documents in a secure place.
- Shred hard drives and other digital media when it becomes useless. You can never really delete anything.
Tax identity theft happens to individuals and businesses, but when it happens to businesses, it is often clients’ information that is stolen. Keeping files locked up and using locked shred boxes in your business help prevent theft of confidential information.
Contact Royal Document Destruction
Contact Royal Document Destruction to set up an account and a schedule for shredding documents for your business. If you are an individual, you can drop documents off at our office or you can schedule a document pickup. We give everyone a certificate