How do you destroy a large amount of tax documents?
Home offices, much like traditional brick and mortar businesses, tend to generate a lot of paper waste. This can include anything from medical records, legal documents, financial statements, or even an email printed out from a client.
Without even realizing it the amount of confidential material you have on hand can become overwhelming and possibly be a liability. Now what? Once secure document retention dates are reached it makes sense to reach out to a secure shredding service company.
Typically, a retention schedule is utilized to ensure proper paper shredding protocols are being followed. Length of retention required and how to then properly destroy the material are the most common factors. Each industry is a bit different. For example, a doctor’s office may need to keep things longer than an accountant, but far less time than a government institution. Most vary between 3-7 years with some on the extreme end of the spectrum having to be retained for 50 years. It is typically safe to destroy tax records after 3 years.
Keep tax records for three years if:
No fraud was committed and all income was reported.
You filed a claim for a credit or refund after your return was filed.
Keep tax records for four years if:
You maintain employment tax records. Keep these for at least four years after the date the tax comes due or is paid, whichever is later.
Keep tax records for six years if:
You could have misreported your income by 25%. If this is the case, the IRS can review your taxes from up to six years ago.
Keep tax records for seven years if:
You filed a claim for a loss from worthless securities (including loser stocks or bonds) or a bad debt.
Keep tax records indefinitely if:
You purchased property, so you can show the amount that you originally paid for it.
You do not file a return each year.
You filed a fraudulent return.
Once retention dates have passed how do you dispose of large amounts of paper? A professional document destruction company is going to be a great option. We at Embassy can help! Search for one that is NAID AAA certified as this will give you the peace of mind for confidentiality and discretion that comes with that accreditation. There are several out there with a wide variety of price ranges but if they are not NAID AAA certified any money you save now could cost you substantially down the road.
Our Conroe, TX location is at 2040 N Loop 336 W Suite 127, Conroe, TX 77304