With so much uncertainty in our day-to-day lives, tax season may be the last thing on your mind. But it’s especially important to be on top of it this year because of changes to the normal tax timeline.
In light of the unprecedented upheaval caused by the COVID-19 pandemic
, Canada has pushed back their annual tax-filing deadline with the Canadian Revenue Agency (CRA) extending its deadline to June 1. While this gives you more time to take care of your taxes, it can also extend the time before confidential tax documents are properly managed, thereby increasing your risk of tax identity fraud.
Document Storage & Disposal Tips to Prevent Tax Identity Fraud
1. Know How Long to Keep Tax Records
Tax records and documents are a minefield of information and it can be overwhelming to know which records to keep for review purposes. How long to keep tax returns depends on the action, expense, or event which the document records. As a general rule of thumb, the IRS recommends three years as the retention period for tax documents in case your return is selected for review, but this rule can vary internationally so be sure to do your own research as well.
Examples of documents to keep
for reference after filing taxes include:
- Any ‘evidence’ that supports an item of income or credit on the tax return – receipts, bank, and credit card statements, cancelled checks, or other proof of payment
- Deduction claims
- Copies of previous tax returns
- Essential records, such as birth and death certificates, citizenship papers, marriage licenses, etc.
2. Properly Store Tax Records and Documents You Need to Keep
Important tax documents that are improperly stored can heighten the risk of fraudsters stealing your confidential information. You can avoid this by following strict fraud prevention
measures, securing your home office
, and practicing a Clean Desk Policy
at home, especially during this extended tax season.
Sort all physical documents necessary to retain, organize them appropriately, and keep them safely locked away to avoid anything falling into the wrong hands. All information stored digitally should be safeguarded with strong passwords
, firewalls, spyware, and other cybersecurity best practices
3. Safely Dispose of Tax Records & Documents You No Longer Need
Disposing of old tax records can seem as easy as throwing them in the garbage or recycling bin
, but it’s crucial to ensure all records are securely destroyed to stop information thieves
from stealing sensitive data. When no longer needed, ensure all physical records, such as paper documents, old hard drives
and other mobile devices, are professionally destroyed by a document destruction company. It’s also worth adopting a Shred-it All policy to ensure document processing is part of your normal routine.
Documents in this category can include outdated records (like tax forms, credit card statements, and utility bills), records available online, personal information unnecessary for taxes, receipts with no purpose, and even scraps of paper or Post-It notes containing confidential information like passwords and Social Security or Social Insurance numbers.
Safely Protect Your Tax Information and Documents
Following these tips will help keep your tax information safe this year. Looking for more advice? Take a step towards even stronger protection by using Shred-it’s new Risk Assessment Tool
to help you and your organization identify and address any risks. You can also contact us
for a free quote or to learn more about how Shred-it can protect your documents