Unfortunately, your personal information is at risk in today’s world. Over the past ten years, identity thieves have had access to more information than ever through the power of the Internet.
Most people understand the dangers that computers bring and focus all their attention on online identity theft. While this protection is important, don’t slack off on securing your printed documentation as well. To keep yourself from falling victim to paper theft, it’s important to shred documentation containing personal information.
The good news is document destruction companies have made shredding easier than ever. However, to maximize on their security, you need to know what to shred and when.
What You Should Shred
So, what documents will identify thieves look for? The simple answer is everything with your signature or personal information on it. These documents may include account numbers, PINS, passwords, social security numbers, addresses, or family history.
Look through your personal records and organize them into “keep” and “shred” piles. As you filter through the paper work, remember that you can access many of these forms online. If you can get the same information from an online source, put the documentation into the shred pile. You should also shred any statements or bills that you have already reconciled.
As for junk mail, many people make the mistake of throwing away the entire letter. You should shred these documents if the contain personal information.
When You Should Shred It
While you can benefit from organizing and shredding your paperwork, don’t get overzealous. You may need to keep some documentation temporarily. The last thing you want is to get an audit request from the IRS and realize you have shredded the tax information you need.
To avoid shredding too much, use this list as a rule of thumb to decide when to shred documentation.
Tax Returns and Information
By law, the IRS has three years to audit your taxes and no time limitation on fraudulent returns. This means you should keep tax information for at least three years. If you want to be extra safe, keep tax information for up to seven years. In cases where people underreported their income by 25% or more, they can audit your return within six years after you filed.
A good tax system includes organizing your tax information in files reaching back three years. After you file for the current year, feel free to shred the three-year-old tax documentation. When you fail to file a return, keep all the documentation indefinitely.
When applying for a loan, some banks ask for documentation of your last three paychecks so you can prove your income. If you plan to apply for a loan, keep at least three pay stubs. Otherwise, you only need one copy of your latest pay stub.
You only need ATM receipts to verify them with your bank statements. Once you have double-checked this information, shred these receipts.
If your bank statement includes mortgage payments, home improvement costs, or business expenses, hold onto them until you have resolved the finances. Keep in mind most financial institutions keep all bank statements online. You may want to rely on using the PDF versions instead.
Insurance Policies and Warranties
You should keep insurance policies and warranties until they expire and then shred them appropriately. If you want to be extra safe, keep the insurance policy up to five years from the expiration date.
Credit Card Reports
You may need your credit card report to resolve a dispute. However, after a year, you most likely don’t need a hard copy of the information.
You may need this documentation if the hospital or insurance company disputes reimbursement. Keep medical statements for at least five years after the end of your treatment. Medical records may include prescriptions, health insurance documents, physician information, and bills.
Real Estate Documentation
Keep real estate documents, such as deeds and mortgage information, while you own the home. If you move, retain them for three additional years.
Shred bills after you’ve paid them, unless you need them to report tax-deductible expenses.
You may also want to keep a permanent documentation file that contains your will, birth certificate, marriage license, and trust documents. Now that you know what documentation to shred, rely on a professional shredding company to get the job done safely.