Filing Your Taxes is Only Half the Job!

Written by Bob Johnson | Apr 10, 2024 4:28:22 PM

Given the time of year, you have either filed your taxes, or you soon will. And when that happens, it’s natural to feel a sense of relief. It’s done. You don’t have to think about it again for another year.

The thing is, when it comes to getting your financial and legal house in order, there is still one more important thing you should do that is often overlooked. You still need to securely destroy unnecessary personal records that have accumulated over
the years.

Why Destroying Outdated Personal Records is Important

When people are asked why they don't destroy old records, some say that it’s because it’s safer to have them “just in case.” Others say it’s because they don’t know when it’s safe to shred them. They worry they’ll get in trouble.

On the first point, experts agree that it’s safer and more secure to get rid of what you can. Here’s why:

Less is More: Destroying unnecessary personal documents can lower the risk of ID theft. Personal documents often contain sensitive information, like SSNs and bank accounts. Keeping unnecessary personal records increases the risk of improper storage. This raises the likelihood of theft, loss during natural catastrophes, moving, or casual, unsecure disposal in the trash.
Messy Bed/Messy Head: Destroying unnecessary personal records reduces clutter and potential frustration. Securely removing unnecessary personal documents makes it easier to find the records you need.
Peace of Mind: By safely eliminating unwanted personal records, you lower the risk of they will be stolen or misused, as well as the risk of you or someone else tossing them in the trash.

On the second point, knowing when they can safely be shredded, these guidelines, gathered from a number of publicly available sources, can help:
For tax records, you can destroy them after 3 years, according to the IRS; however, some financial consultants propose seven years for the wealthy.
When it comes to old banking records, anything older than one year should be properly destroyed, unless they contain tax, home repair, or significant purchase information, in which case apply the 3-year IRS guidance.
As far as income records go, after getting your W-2, you no longer need last (or any other) year’s pay stubs.
If you have investment statements, you can securely destroy last year’s after receiving and validating your new annual statement.
Loan papers should be retained until the loan is paid. The final statement and letter confirming payment are all you need after paying it off. The final statement can be discarded after seven years.
Insurance documents can be destroyed after getting a new one, whether they are from the same or a different insurer.
Property transfers and home/real estate documents can be shredded after seven years. This includes purchases, renovations, and sales receipts.
You should keep birth, marriage, divorce, and death certificates forever.
As for wills, estate plans, and powers of attorney, these records should be kept in a safe place while you are alive and until your estate is settled. Your attorney or executor should have copies of the originals. Even if they're revoked or replaced, maintain the older ones to show what changed and validate the newer version.
Social Security statements should be destroyed annually after you get a new one.
When it comes to vehicle titles, registrations, and maintenance records, they should go once you no longer own the vehicle.
And finally, healthcare records, most of which can go one year after final payment. Keep in mind, however, that records regarding surgeries, treatments, and diagnoses should be kept for up to ten years or permanently.

And Be Wary Relying on Electronic Records

Increasingly, people are relying on “the cloud, or a vendor’s website, or their own
electronic copies of records. That’s a mistake.

1. If technical faults permanently disable electronic records, paper copies are the only backup.
2. Electronic data can be corrupted or lost due to hardware, software, or human error. Again, physical records protect against malfunctioning or hacked computer storage systems.
3. Finally, original paper records may be required by law. Considering these concerns regarding personal finances and legal documents, experts recommend obtaining or generating physical copies of crucial transactions and records. Of course, this also means that when those paper records are replaced by new ones, the unneeded ones must be destroyed.

Shred America to the rescue!

When it comes to securely destroying personal records, Shred America has two ways
to help.

Drop-n-Shred™: For maximum savings, you can find one of our many secure,
convenient drop-off locations here. Just bring it in during business hours, and for a
small fee, we’ll take it from there.

On-site Shredding: If you prefer to witness the destruction, we can send you one of
our mobile shredding trucks. You will see how, in a matter of minutes, years of
unneeded records are turned into confetti.

Secure Pick-up: On the other hand, if you prefer it be destroyed at our maximum
security, NAID Certified facilities, we can do that too.
All it takes is one call to (866) 747-3387, or you can use our convenient online
scheduling tool.

Contact us today!! You’ll be glad you did.
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Note: The above material is not legal or financial advice. Instead, it distills and interprets general
information that is publicly available from the Internal Revenue Service, the Financial Industry
Regulatory Authority, the Federal Trade Commission, the American Institute of CPAs, the Consumer
Financial Protection Bureau, the National Archives and Records Administration, and several state
hospital associations and medical boards.

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