As tax season ends, you’re probably wondering how long you need to hold onto your old tax forms, pay stubs, receipts, and other tax-related documents. Some people never feel comfortable parting with these documents because they worry about not having them when a problem with the IRS comes up – but does that mean they have to hold onto them forever?
Fortunately, no! You certainly don’t need to hold onto your tax documents forever, and it may be best if you don’t. The more paperwork there is with your personal information on it, the more likely it may be that something will end up in the wrong hands.
Tax Document Shredding Timeline
The safest bet is to hold onto your old tax documents for the past 10 years, which is the longest you’ll need to keep anything, but that doesn’t mean you have to hold onto everything for that long. In fact, there’s a pretty good timeline you can use to parse down your documents as time goes on.
After One Year
After you file this year’s taxes, you can dispose of W-2s, pay stubs, 1099s, and brokerage statements from the previous year’s filing. Don’t shred these documents until you’ve already filed your taxes this year because you might want to compare your earnings and taxes from last year to this year.
After Three Years
After filing your taxes, you should be safe to go ahead and shred W-2s, 1099s, K-1s, canceled checks, charitable donation receipts, and other information that you may have used for prior filings.
After Six Years
If for some reason you filed a tax return and failed to report more than 25% of your gross earnings, you should wait six years before getting rid of W-2s, 1099s, and other tax forms. If you haven’t been audited by the IRS after six years for this issue, the likelihood of being audited is fairly low. That said, you should always report your earnings accurately to avoid an audit in the first place.
After Seven Years
After seven years have passed, it’s safe to shred old tax documents for closed retirement accounts and losses from worthless securities and bad debt deductions.
After 10 Years
The statute of limitations for the IRS to pursue collection goes back only 10 years, starting from the date that tax liability was assessed. This means that you are probably safe to shred and dispose of most of the tax-related documents that you have held onto for 10 or more years.
We Can Help You Shred!
Acro Photo Print Inc. offers secure document shredding so that you can rest assured that your personal or business information is safe. If it’s time to get rid of old documents that are cluttering up your space, reach out to us so we can tell you more about our document shredding options.
Get in touch with Acro Photo Print Inc. today by calling (929) 244-4322">(929) 244-4322 or by contacting us online.