February 06, 2023
Tax season can be a complicated and stressful time. Determining what documents you should keep throughout the year, what papers you can dispose of, and which you should shred can be confusing. Distinguishing between these documents is important because properly disposing of private information can help prevent identity theft.
To help increase your understanding of document protection and destruction basics for tax season, we answered some frequently-asked tax document-related questions:
The U.S. Internal Revenue Service (IRS) recommends keeping tax returns between three and seven years, depending on your situation.
The IRS’ Period of Limitations refers to the date \when the filer and/or the IRS can amend a tax return. In most cases, the Period of Limitations is three years, but it extends to six years “if you do not report income that you should report” and seven years “if you file a claim for a loss from worthless securities or bad debt deduction,” according to the IRS.
If you receive paper pay stubs, you can shred them at the end of the year, but you should keep them until you receive and compare them to your W-2 form from your employer.
The IRS recommends keeping tax records, including W-2 and 1099 forms, for at least three years. After that time, while you might want to save your tax return, you can shred your other tax documents.
You should keep your IRA statements until your year-end statement arrives. Keep year-end statements for six years for tax reasons.
Yes. You can shred most bills you have paid off. As a general rule, you should shred any document that includes names, addresses, and other private information that is not needed for taxes.
You can shred sales receipts immediately unless they are related to taxes, warranties, or insurance. You should save any tax-related receipts for at least three years, but the IRS has up to seven years to audit you under certain circumstances. Save any home improvement-related receipts until you sell your home because certain home expenses may reduce your capital gains tax.
It’s important to never put confidential documents into the garbage can or recycling bin. Information thieves can piece together personal information found in the trash, even if you rip the paper up manually. One of the best ways to protect your privacy and prevent identity theft is to shred all unneeded tax returns.
To raise awareness and promote privacy protection, Shred-it® organizes Community Shred-it® events, offering free paper shredding for residents. Some Community Shred-it® events help raise funds for charity. Community members who bring documents for secure shredding might be asked for a small donation. Visit our community page to find Community Shred-it® events in your area this tax season.
If you have lost a tax return from a previous year, you can order a copy from the IRS. Tax returns are available for the current year and three prior tax years. Delivery times for online and phone orders typically take five to 10 days from the time of the request. You can request a copy online, by phone (800-908-9946), or by mail using either Form 4506-T or Form 4506T-EZ.