Wednesday, April 12, 2017  02:25 PM | By: Matt Dow
How Should I Shred Old Documents?

Spring Clean Your Old Files

Whether you are maintaining your important documents and paperwork in file folders or storing them digitally, it is important to clean up the clutter frequently throughout the year. Right after tax season tends to be a good time. When it does come time to spring clean your old files, you might find yourself wondering, “How should I shred old documents?” Take a look below to learn the dos and don’ts of document disposal.

How Long Do I Need to Keep Documents For?

Stack of Documents

First, it is important to know what you should shred, what you need to keep on hand, and what you are able to simply toss in the waste bin. It may be tempting to immediately shred every last item the moment your taxes are filed, but that could be a big mistake. Depending on your line of work, gains or losses, place of residence, and filing status, the IRS has anywhere from three to seven years to open an audit. It is vital that you keep any documentation that supports your tax return for a minimum of three years, and if you live in a state that collects state income tax, you’ll need to keep those documents for an additional year.

If you are an employee, a freelancer or an independent contractor and the IRS questions whether or not you’ve reported all of your income, the IRS can audit you up to 6 years after you file your tax return. It is for these reasons and more that you’ll want to keep your W-2s, 1099s, investment statements, property documents, asset documents and anything else that is necessary to support any statements or claims made on your tax return.

What Old Documents Should I Shred?

Shredded Documents

Once enough time has passed, you’ll want to rid yourself of all the documents you no longer need. While you should still hold onto important documents like social security cards, birth certificates, vehicle information, license documentation, insurance policies and other necessary identifying information, most all other documents can be disposed of after 5-7 years. After you’ve determined what you can do without, it is time to decide how to dispose of it. Anything that has your social security number on it or those of your employees absolutely needs to be shredded to protect your identity and those of your staff. Bank statements and other investment documents should also be shredded, as well as any documents listing personal information such as names, addresses, receipts, credit card statements and more. If there is no real identifying information, it should be safe to simply toss it in your waste bin, or better still, recycle it.

What Shredder Will Work Best For Me?

Shredded Paper

When you are choosing a shredder, it is important to know what cut that shredder will make. There are three main shred cuts to choose from: strip-cut, cross-cut and micro-cut.

Strip Cut Shredder

Strip Cut Shredder

A strip-cut shredder does exactly what it sounds like it does. It will create strips of your documents. While this is making your information more difficult to access, a would-be identify thief could easily recreate each page.

Cross-Cut Shredder

Cross-Cut Shredder

More security is provided by cross-cut shredders, which create tiny pieces of your document. With cross-cut shredders, your information is more guarded, but it also still has the potential to be deciphered by those who are willing to put forth the considerable time and effort it would take to do so. Even though it doesn’t offer the security of a micro-cut shredder, cross-cut shredders are often a cost-effective way to put a strong safeguard on your identity.

Micro-Cut Shredder

Micro-Cut Shredder

A micro-cut shredder is the best bet for truly protecting your personal information. Micro-cut shredders essentially turn your documents into confetti, and quite frankly, make it nearly impossible to ever put your document together again. How secure you want your information to be will ultimately determine which cut style is best suited for you and your needs.