Tips to Keep Your Tax Records Secure
Keep your tax records safe and secure, whether they are stored on paper or kept electronically. The same is true for any financial or health records you store, especially any document bearing Social Security numbers.
Always keep copies of tax returns and supporting documents for several years to support claims for tax credits and deductions.
Because of the sensitive data, the loss or theft of these documents could lead to identity theft and have an economic impact. These documents contain the Social Security numbers of you, your spouse and dependents, old W-2 income and bank account information. A burglar could easily turn your old shoe box full of documents into a tax-related identity theft crime.
Here are just a few of the easy and practical steps to better protect your tax records:
· Always retain a copy of your completed federal and state tax returns and their supporting materials. These prior-year returns will help you prepare your next year’s taxes, and receipts will document any credits or deductions you claim should question arise later.
- If you retain paper records, you should keep them in a secure location, preferably under lock and key, such as a secure desk drawer or a safe.
- If you retain you records electronically on your computer, you should always have an electronic back-up, in case your hard drive crashes. You should encrypt the files both on your computer and any back-up drives you use. You may have to purchase encryption software to ensure the files’ security.
- Dispose of old tax records properly. Never toss paper tax returns and supporting documents into the trash. Your federal and state tax records, as well as any financial or health records should be shredded before disposal.
- If you are disposing of an old computer or back-up hard drive, keep in mind there is sensitive data on these. Deleting stored tax files will not remove them from your computer. You should wipe the drives of any electronic product you trash or sell, including tablets and mobile phones, to ensure you remove all personal data. Again, this may require special disk utility software.
The IRS recommends retaining copies of your tax returns and supporting documents for a minimum of three years to a maximum of seven years. Remember to keep records relating to property you own for three to seven years after the year in which you dispose of the property. Three years is a timeframe that allows you to file amended returns, or if questions arise on your tax return, and seven years is a timeframe that allows filing a claim for adjustment in a case of bad debt deduction or a loss from worthless securities.
To learn additional steps you can take to protect your personal and financial data, visit Taxes. Security. Together. You also can read Publication 4524, Security Awareness for Taxpayers.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.
Additional IRS Resources:
· IRS Commissioner Koskinen's Statement on the Security Summit Group Public Awareness Campaign
· Taxpayer Guide to Identity Theft
· Publication 5027, Identity Theft Information for Taxpayers
· www.irs.gov/identitytheft – Identity Protection: Prevention, Detection and Victim Assistance
· IR-2015-129, IRS, States and Tax Industry Announce New Steps to Help Public to Protect Personal Tax Data
· Fact Sheet 2015-23, IRS, States and Industry Partners Provide Update on Collaborative Fight Against Tax-Related Identity Theft
· IRS and Partner Statements on the October 2015 Security Summit Meeting
IRS YouTube Videos:
· Taxes. Security. Together. – English
IRS Efforts on Identity Theft – English | Spanish