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Tax Paperwork

As tax season arrives, we need to be aware of the dangers of identity theft. Tax forms provide information that theives would love to get their hands on. To conquer the stacks of paper that inevitably accumulate in every household, it’s important to understand what you need to keep and what you can safely shred.

We provide some helpful tips on handling your tax forms in order to keep you safe and organized

• Tax returns: The IRS has three years to challenge information in your return and six years to conduct an audit based on unreported income. Keep tax returns and supporting records, like W-2s and 1099s for at least seven years.
• Investment statements for taxable accounts: Most brokerage firms and mutual fund companies send annual statements summarizing the year’s transactions. Once you have these, you should shred your monthly and/or quarterly statements.
• Bank statements: Keep statements that back up information on your tax returns for up to seven years. Other bank statements can be shredded after reviewing for errors. Bank Statement Storage
Bank statements: Keep statements that back up information on your tax returns for up to seven years. Other bank statements can be shredded after reviewing for errors. Bank Statement Storage
• Credit card statements: Keep statements for big purchases, like jewelry or large appliances. You might need them for warranties. If you put charitable contributions on your credit card, keep the statement for your tax records. Other monthly statements can be shredded once you’ve reviewed them for errors or unauthorized purchases.
• Pay stubs: While many people say to save these, it’s a huge mistake. They contain everything an identity thief needs to open an account. Keep three months of history only if you are applying for a mortgage.
• ATM receipts: Shred all receipts after you balance your bank statement.
• Canceled checks. With no significance for tax or other purposes, these should be destroyed after one year. Canceled Check Storage
• Retirement plan contributions: Keep records of contributions to non-deductible individual retirement accounts, such as a Roth IRA, indefinitely. Without them, you may find yourself paying taxes again when the money is withdrawn. Some financial institutions keep records of IRA contributions, but it’s best not to count on it.
• Insurance policies, wills and other legal documents: These documents should be kept indefinitely.

For additional identity theft prevention tips and information on how long to keep financial records, visit Fellowes.Com or check with your tax professional.

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