Top 6 Tips for Safeguarding Your Tax Records

File Taxes Early

Hackers look for people to make mistakes when they file at the last minute. By filing your taxes early, you can take your time and be careful not to make any errors or accidentally dispose of important information. Better yet, you’ll get your money sooner when tax time comes. In addition, filing well before the April 15 deadline will give the Internal Revenue Service more time to review your filing, meaning you can avoid any potential delays.

Keep Tax Records Secure When Preparing Your Return

Tax records contain a lot of personal and financial information. Because of this, it’s important not to leave tax documents lying around for anyone to access. These documents can include anything from receipts to credit card information to anything containing a Social Security Number or federal tax ID number.

The key is being thorough and efficient. The better organized your financial records are, the better you will be able to watch for missing items or unusual activity. In addition, keeping your tax records organized will allow you to be better prepared for the next filing season.

When you’re preparing your return, make sure you have a secure place to store your documents when not using them. For physical documents, that can include a locked filing cabinet or drawer, while electronic documents should be password protected on a computer that has virus and malware protection or in a secure document management system.

Be on the Lookout for Scams

Tax season is a prime time for fraudulent schemes. So much so that every year the IRS creates a list of things for people to look out for when filing tax information. These schemes include everything from the promotion of fake charities to impersonation of IRS authorities and unemployment insurance fraud. One specific crime to look out for is if anyone calls you pretending to be a tax agent and demanding you pay a tax bill. The IRS, however, would never demand payment or ask for financial information over the phone. When the IRS wants to contact you, this is typically done with a mailed letter.

Securely File Your Taxes

There are a couple of absolute “don’ts” when it comes to filing your tax paperwork. First, never just drop these files in a mailbox. Instead, take them directly to your Southern New Jersey post office and send these documents via first-class certified mail. Second, never use public Internet services, like a library or a wireless connection, to send your mail electronically. Use a wired Ethernet connection if at all possible. These efforts will reduce the likelihood of an unsavory source intercepting your paperwork.

Create a Tax Document Retention Schedule

It’s important to determine what you should and shouldn’t keep on hand once your taxes are filed. Certain documents should be retained in the event that there are any questions about your return. As a general rule, the IRS recommends that you retain your tax documents for three years. Documents to keep include any evidence that supports your income or deductions, including W-2s, 1099s, canceled checks, receipts, or any other proof of payment. You should also hold onto tax returns from previous years.

Have Your Old Tax Records Professionally Destroyed

The time will come when you want to clear out your personal or business’s old tax records. The law is very specific about the destruction of confidential information, and trying to do this yourself is not advisable. The process of using a personal shredder can be time-consuming, and the risk of making a mistake is high. It is much better to secure the professional services of a Southern New Jersey shredding company.

Paper shredding companies employ bonded security professionals to ensure all of your documents are completely destroyed and you remain not only legally compliant, but your tax records stay safe from fraudulent activity. There are many options available, from one-time shredding to regularly scheduled pickups or on-site shredding services. If you need help with this, consider PROSHRED® Southern New Jersey. We are here to answer any questions you may have. Give us a call today to get started on handling your secure document disposal needs.