What And When To Shred: Quick Tips For Businesses And Individuals

Identity theft is one of the biggest threats in the modern world. How you store employee, client, and personal information could be putting you at risk. Keeping every sensitive document and record indefinitely can become both dangerous and burdensome. Most documents only need to be kept for a few years, but how do you know what to get rid of and when to do your shredding? Here is a simple guide to help you keep the dangers and clutter down.

What and when should businesses shred?

Records of employees should be kept for 3 years after their termination, and records that support earnings should be kept for 4 years. Documents showing unclaimed property, like paychecks, should be stored indefinitely. If your company deals with interstate commerce and is subject to the Fair Labor Standards Act, you must keep your employees’ timecards for at least 3 years. This ensures your business clears most federal and state requirements.

Keep employment tax records for 4 years after the date they are paid or due, whichever is longer. Sales tax returns are a bit more tricky. The length of time you’re required to keep these depends on which state you’re in. It is best to check with your tax advisor before shredding them.

Receipts, mileage logs, and other documents that support transportation expenses should be kept for 3 years.

According to IRS guidelines, records associated with business property must be maintained for as long as you own the asset, plus seven years. These documents must be saved to determine the gains and losses of a sale.

What and when should individuals shred?

You will want to keep certain records like marriage licenses, birth certificates, and social security papers. You should also save bills, receipts, and paperwork from large purchases like electronics or jewelry.

Finished tax returns should be kept for at least 6 years after they are due or filed, so you can prove that you filed them. Record supporting documents like canceled checks, mortgage interest payments, and charitable donations should be kept until the statute of limitations expires. Copies of Forms 8606, 1099-R, and 5498 are required by the IRS to be kept until you have withdrawn all the money in your IRAs. Make sure you hang on to any IRA records related to withdrawals and contributions.

The things that generally take up the most space are bills and old receipts. Don’t hold on to them for longer than you need to. You can shred these when the payment goes through or at the end of the year. The only ones you should keep are documents supporting items on tax returns or the purchase/sale of expensive goods. This is just in case you need evidence for an insurance claim.

Detailed records of purchases and sales are vital to accurately reporting events involving stocks and bonds. Dates, dividend reinvestment, prices, quantity, and investment expenses should all be included. These documents should be kept for as long as you own the investment.

Real estate records should be kept for as long as you own the property, and 3 years after you give up ownership. Records of sale, improvements, and relevant insurance claims should also be kept throughout ownership.

Don’t shred until you are certain!

Even with these guidelines, it is always a good idea to consult your tax advisor before shredding. Some states have varying timelines for different records and documents, so make sure it’s okay with your state to destroy certain information.

Do you need to shred sensitive documents?

If you have documents you need to safely destroy, contact UCI Shredding today. We understand the importance of protecting private information. We offer secure, cost effective, and environmentally friendly on-site document shredding Solutions, including media destruction. Call us at (806) 372-7722 or Send Us an email to see how we can help you and your business.