Tax Season Is Over, So When Should You Shred Your Old Documents?

Tax Season Is Over, So When Should You Shred Your Old Documents?

Now that another tax season is behind us, it’s a good time to think about what to do with your old tax records. Personal tax documents greatly differ from business ones, so it’s imperative for business owners to know how long to hang onto records and when it’s time to safely and securely shred older ones.

Of course, it’s good business practice to keep a permanent, final copy of your business income tax returns to help prepare future returns, but this is why electronic documentation and storage exists. For the paper stuff, there are a lot of rules to follow, but not all will apply.

For example, if you have employees, the IRS suggests that all employment tax records be retained for at least 4 years after the date which the taxes were due or were paid, but only for whichever is later.

For ledgers, there is a mixed professional opinion on how long to keep these. While there are many tax officials who will lean towards keeping these permanently, for supporting documentation, like accounts payable and receivables, these should be kept for a minimum of 7 years. Canceled checks should be kept for the same amount of time.

As for bank records and other financial statements, 7 years is also the suggested amount of time to keep a physical copy.

Of course, businesses also have to deal with other types of sensitive documents that pertain to tax record keeping, like human resource files, business asset records, and additional key documents. All of these have specific time frames for keeping, so it is best to check with your CPA or the IRS to make sure you’re retaining what needs to be retained and destroying what can be destroyed.

Document destruction is not something that should be left with lower-level employees, or anyone else in-house for that matter. As we discussed last week, improperly destroying sensitive documentation can lead to potential security breaches that puts corporate security at risk. An employee who is virtually obligated to look at each document as they feed it into the shredder means you’ve already risked your privacy.

Legal Shred is an expert in Florida shredding law that can assist business owners in properly destroying old tax documents. With mobile and offsite shredding options, Legal Shred offers expert privacy, thereby mitigating any and all security risks.

It’s time to make room and save money in offsite storage by properly destroying your old tax documents. Contact Legal Shred for a quote today.

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