Preparing Your Financial Files Before Tax Season Begins

The end of the year is an excellent opportunity to clear out old files and prepare for the new year. Another opportunity for businesses to dig into their financial files is during tax season. You typically need to pull together information for your accountant, which gives you the perfect time to remove outdated documents safely. Financial records kept longer than necessary increase your risk of loss or theft. No company wants to become the focal point of a data breach. Tax time is a good time to enlist the services of a professional shredding company. They can help you dispose of outdated documents and stay in compliance.

How to Safely Dispose of Old Financial Documents

Financial documents contain sensitive business and personal information, such as bank records and customers’ personal information. When you keep these documents in your office longer than necessary, the risk of identity theft, fraud, and compliance issues increases. Throwing documents away or using an office shredder is not enough. Instead, the smarter choice is to use secure shredding.

Professional shredding companies can help you get rid of outdated materials while keeping you compliant. If you have struggled to understand the best way to dispose of old financial records safely, review these suggestions: 

1. Financial documents you can safely shred. Not all financial records should be destroyed immediately. You might need them for future audits. Always check with your accountant or tax professional, but a good rule of thumb for keeping documents is as follows:
   1. Bank statements should generally be kept for three to seven years. They support tax filings, audits, and financial reviews.
   2. Invoices are typically kept for three to seven years, depending on your tax and accounting needs. They are often used to support income reporting, expense tracking, and deductions.
   3. Credit card statements are usually retained for three to five years. If any statements are tied to tax-deductible expenses, they may need to be kept longer.
   4. Canceled checks should be kept for three to seven years, especially if they support your tax filings, major purchases, or business expenses. 
2. Financial documents you should keep for longer periods. Long-term retention is important for audits, disputes, and compliance. Secure off-site storage is just as important as shredding, helping keep your office tidy and giving you peace of mind. These documents should be retained beyond your annual cleanout:
   1. Tax returns
   2. Payroll records
   3. Audit records
   4. Major asset purchase documents 
3. Secure shredding makes all the difference. Professional document shredding protects the sensitive information held within your financial records. It also supports your compliance requirements while reducing the risk of a data breach. You will receive a Certificate of Destruction that serves as proof of proper disposal for your compliance needs. 
4. Make financial document destruction part of your annual tax prep. Tax season is a natural time to review your financial records and decide what to keep and what to destroy safely. By scheduling a pickup before or during tax preparation, you can stay organized and reduce the risk of holding on to outdated documents longer than necessary. On-site and off-site shredding options are convenient, helping you stay focused on your day-to-day to-do list.

Enjoy This Year’s Tax Season with Help from Crown Information Management

You can enjoy tax season this year when you work with Crown Information Management to dispose of outdated financial documents. Our team will help you take care of those pesky files early in the season to help reduce the risk of fraud, limit unnecessary exposure of sensitive information, and make your life much easier.

We help you stay compliant with our secure shredding services, ensuring your records are properly destroyed. We offer both on-site and off-site destruction services and will provide a Certificate of Destruction to keep for compliance purposes. We are here to ease the headaches that can come with tax season. Give us a call to find out more!

From paper shredding and records storage to hard drive and X-ray destruction, we support your business as you look to start the year with stronger security and less clutter. To learn more about our shredding and information management services, call 800-979-9545 or contact us online. Let our team help you protect what matters most. We are a SOC 1, NAID AAA, and PCI-certified company.