Tax time is a busy time not just for accountants – but for identity thieves too.
Identity thieves use sophisticated phishing scams online to gather personal information. They also find – and steal – tax returns and other sensitive documents by going through garbage containers and recycling bins.
The cost to victims of identity theft is an estimated five billion dollars per year in the U.S. Furthermore, if your identity is stolen it can be a long and frustrating process to undo all the damage.
It’s important to know which documents you have to keep and which ones you can dispose of securely.
Here’s a guide:
- Keep tax returns for four years after they are filed.
- Once you have the annual statement for taxable investments, dispose of all the monthly statements you’ve received. Document shredding is the most secure method of disposal. E-waste can be shredded too.
- Keep bank statements that back up information on tax returns for up to seven years. Otherwise, shred them.
- Destroy canceled checks after a year unless they confirm information on your tax return.
- Keep credit card statements for big purchases and charitable contributions. Otherwise, shred statements.
- Shred pay stubs after you have received payment.
- Keep records of retirement plan contributions indefinitely.