It's a problem we all deal with as adults: Stacks of papers piling up that shouldn’t be thrown straight in the trash. Unfortunately, destroying these files isn’t as straightforward as it would seem. What needs to be shredded or tossed? How long should you hold onto tax statements versus bank statements?
In this article, we’ll explore how to destroy sensitive documents in a safe and convenient way.
Which documents should I destroy?
First, the obvious: Documents with highly sensitive information should never be thrown straight in the garbage, as it could be easy for prying eyes to steal that information and your identity.
Destroy documents that include information such as your:
Social Security number
Tax information
Credit card and banking information
Drivers license ID
Insurance information
Medical information
You should also consider destroying documents with less obvious identifying information. For example, a pre-approved credit card offer addressed to you could still be used to steal your identity as it has your name and address on the envelope. For that reason, even certain junk mail should probably be destroyed.
Related article: Which documents should we keep a paper copy of?
What is the best way to destroy documents?
There are many different ways to destroy documents you no longer need. Some are more obvious and environmentally friendly than others.
Get a paper shredder
If you don't already have a paper shredder at home, it's a good idea to invest in one. This is one of the safest ways to keep your paper information safe.
Send out documents to be destroyed
If you have a high volume of paper documents that would take too long to destroy yourself, consider sending them out to a service that completes this task for you. Of course, you'll want to be sure of their reputation, as it could be a risk to hand over a large volume of sensitive information to another party. Other businesses like FedEx, Kinkos, and UPS frequently offer document destruction services as well.
Censor specific information
There's a good chance many of the documents you have only need small omissions to make them safe for disposal. Use a black sharpie or a hole punch to censor information such as a Social Security number or tax ID number. On the downside, this could be very time-consuming if you have a high volume of documents with lots of sensitive information.
Soak them in water
Another solution if you don't want to shred each document one by one? Submerge your documents in water until they are pulpy and easy to destroy. You could do this by filling a plastic bag or trash can with water, or putting papers in the bathtub. Unfortunately, this solution may be more messy than other alternatives.
Burn documents
This is an option if you have a fireplace or a safe area in which to burn documents, such as a fire pit. However, you should take this option with caution as it could be dangerous to do so in your home or surrounding environment, especially in areas prone to forest fires. Burning is also not ideal for the environment as it releases additional carbon dioxide, so consider this a last-ditch option if you're in a pinch.
Related Article: How To Store Paper Documents Long-Term (6 Methods)
When should I destroy sensitive documents?
Some sensitive pieces of information shouldn't be destroyed until after a certain period of time. This is especially true for documents related to your taxes, and other important pieces of information like your homeowners insurance. Here’s how long you should hold on to this important information before destroying it.
Tax statements
According to the IRS, you should keep specific tax records for the following amount of time before destroying them:
Three years - Income tax returns
Four years - Employment tax records for years after the date that tax becomes due or is paid (whichever is later)
Six years - If you do not report income that you should report OR it's more than 25% of the gross income shown on your return
Seven years - If you file a claim for loss from worthless securities or bad debt reduction (bankruptcy)
Indefinitely - If you don't file a return OR if you file a fraudulent return
Other statements
Bank statements
One year - Paper copies
Three years - Digital copies, paper copies related to tax deductions
Credit card statements
60 days - Statements that don’t include tax-related expenses
Three years - Statements that do include tax-related expenses
Mortgage closing statement
Until you receive a new policy
Monthly mortgage statements
Three years - For tax-related purposes
Homeowners insurance and car insurance policy
Until you receive new policies
Utility bills
One year
Keeping track of mountains of paper might feel overwhelming at first. Knowing when and how you should destroy important documents will help keep your family’s important information safe, and leave you feeling organized and ready for anything.
Related: Checklist: How to keep your sensitive information safe
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