Certainly, it’s a big relief to finish and turn in your taxes every year. However, that doesn’t mean you can toss them into the trash.
Truthfully, you should always hold on to tax records. After all, there is the potential for future requests of information.
Perhaps, you are in doubt about keeping financial documents. In that case, err on the side of caution and keep them.
However, at some point, it will be appropriate to part with tax records. The most effective way to do so is through document shredding.
The IRS has guidelines in place for the duration of keeping tax records. Yet, they don’t govern how to do it (digital, printed, or combination). This task is up to you.
Disposing of tax returns, W-2s, pay stubs, 1099 forms, and investment documents are the main concern.
There are a few things to do before moving to the document destruction step. First, keep copies of your filed return, including attachments and worksheets, for 3 years.
Also, hang on to supporting income documentation. This includes 1099 forms, bank statements, charitable contribution receipts, and similar information.
In reality, some sources suggest retaining tax returns for 7 years. Then, it’s okay to shred.
Traditionally, employees are provided with 3 copies of a W-2. These are to be filed with federal and state returns, as well as your own records. W-2s also fall into the three-year retention category.
However, the IRS recommends you keep your copy until the time of receiving social security benefits. After all, you may need to prove your work record and earnings of a particular year.
Be sure to verify pay stubs against your W-2s. Thus, you should hang on to pay stubs for one year. Additionally, monthly brokerage statements should be saved for one year.
Many people are self-employed or receive multiple 1099 forms from more than one source. Consequently, it can be complicated keeping track of it all.
Therefore, the IRS suggests keeping these records for 6 years. Then, you can choose a Florida document shredding option.
Some people are content to toss everything but the tax return. Yet, IRS guidance recommends retaining any record supporting income or deduction.
In doing so, you’ll ensure everything is accurate. This is an important step before calling the mobile document shredding service. Also, receipts are especially important to keep when it comes to claiming deductions.
Most of all, stay organized. Keep your return and all supporting documents. Actually, you should store them in a labeled folder or file. In doing so, they’re secured.
You won’t have to deal with documents falling out or landing in a neighboring file. Plus, it’s wise to save a digital copy of your return to ensure safekeeping.