Tax season can be a stressful time, especially if you’re trying to determine which documents you should keep after tax season is over and which ones you can shred. Creating a records retention schedule for your personal tax files and business documents can make preparing for taxes easier in the future and can also safeguard you from identity theft.
It can be confusing to determine which records to keep and which to destroy. The IRS website lays out record retention guidelines for tax documents and financial information. Here are the record retention periods they suggest:
Another general rule of thumb for tax document retention includes keeping pertinent information such as birth certificates, marriage licenses, divorce records, military papers, estate planning documents, life insurance records, and bank account information for an indefinite amount of time – or most likely forever.
Regarding business records, it makes sense to keep a final copy of your business’ tax returns and any communications with the IRS permanently. It’s okay to be conservative with your document retention and keep financial statements and general business ledgers permanently also - even though it’s not required.
Now that you know which documents you should keep, you can throw the rest away, right? Wrong! Documents with personally identifiable information, whether it’s tax records, bank statements, insurance information, etc…can leave you vulnerable to identity theft if they aren’t securely disposed of. Enlist the help of a professional document shredding service who can provide you with a Certificate of Destruction to ensure your confidential information doesn’t fall into the wrong hands.
More about document retention best practices:
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Record Storage Systems
Record Storage Systems specializes in lifecycle document management services that address your document storage, scanning, electronic document management, and shredding needs. As your business changes, your document management needs evolve. We offer reliable solutions that enable you to manage and access your documents and electronic records securely and easily.