Tax documents are highly vulnerable to fraud and identity theft. According to Shred-it’s 2020 Tax Season and Fraud Prevention Survey, the majority of taxpayers (41%) think tax documents are the most susceptible to information fraud or identity theft—as compared to credit card statements (39%) and medical records (5%). Make sure you’re taking the proper steps to protect confidential information during tax season and throughout the year.
Tax Season Consumer Stats
- Properly store tax paperwork, including old tax returns.
- Less than half (48%) of taxpayers correctly store tax documents
- 45% store them in an unlock desk or drawer
- 5% don’t store them at all
- Know how long to keep tax records.
- 42% surveyed keep tax documents 7+ years
- 26% keep them 4-7 years
- 27% keep them less than the IRS recommended 3 years
- Shred unnecessary or outdated documents.
- Only 77% of respondents’ shred tax documents before throwing them away, while more than 1 in 5 do not
Tax Season Preparedness Best Practices
- Implement document security measures. This includes a Shred-it all policy to ensure any necessary documents are consistently and correctly disposed.
- Employ safe storage methods. Make sure tax records are stored under lock and key or electronically kept in a secure site.
- Properly dispose of outdated technology. As you upgrade to new systems, make sure your old hardware is completely destroyed, so that it doesn’t retain sensitive data that could be stolen.
- Be ready to ask questions. Tax preparers are often aware of best practices in terms of keeping tax documents secure. Don’t be afraid to ask your tax preparer how they are safeguarding your files, or how best to personally keep them secure.
to view the full Tax Survey results.
Shred-it can help tax preparers and their customers keep documents and personal information out of the wrong hands. To learn more about how we can help, visit our page for accountants.