It’s tax season; you’re buried in pay stubs, forms, receipts, and all sorts of other documents. Plus, you have filing cabinets filled with past years’ paperwork. Is it really necessary to keep all of those documents forever? Or, can you properly shred tax documents after a period of time to create some space and eliminate clutter? The real answer – it depends on the documents. Continue reading to learn more from the team at Shred Monkey.

When to Shred Tax Documents

1040s and Tax Returns

It is wise to save your original Form 1040 income tax returns, along with any schedules and supporting paperwork, for as long as possible. They might, one day, be required to determine the worth of specific assets. With today’s technology, you can simply make digital copies of these documents for easier storage and filing. That way, you can properly shred the physical copies and still have everything you need should the time come.

Income and Tax Documents

Up until the period of limitations on that particular return expires, you must maintain the records that back up the items listed on your return. W-2 forms, 1099s, canceled checks, receipts for charitable contributions, and other documents required to prove income or deductions are among them. In general, the IRS has three years to charge additional tax or begin an audit if you filed a legitimate return and properly declared your income during that time.

It is generally recommended to keep supporting documents for a time of three to seven years. This is because the IRS has six years to challenge your return if they believe you have underreported your income by at least 25%. Additionally, the IRS has up to seven years if you submitted a claim for a loss from worthless securities or bad debt deduction. Furthermore, if the IRS believes you filed a false tax return, there is no statute of limitations on bad-faith submissions.

Shred Monkey Has You Covered

Shred Monkey is here to help protect the personal privacy of Indianapolis residents. Whether it’s personal documents, business shredding services, or hard drive destruction, we have you covered. Contact us today at (317) 916-1800 to request a free estimate.