How and What Business Documents to Destroy: Keep Your Business Legal and Secure.

Be Diligent About the Records and Files You Should Keep vs. Those that Should be Destroyed.

How many times have you had an important document in your hand ready to destroy, but hesitated because you didn’t know if you were breaking some regulation, rule or just an old wives’ tale about how long to keep that information?

Oh, “let’s just keep it”, you say… to be safe.

A year later those files you decided to keep now become boxes, and a year later those boxes have multiplied like rabbits. Now you’re contemplating storing them offsite, or worse, taking up precious office space with information that should be destroyed.

In this article we will give you some tips on not only what you should keep, but the best way to destroy it.

We have a caveat to this important subject: There are rules upon rules, and regulations upon regulations that the government has instituted. But, there are also rules and regulations in many industries such as banking, accounting, legal, healthcare, etc. For example, doctors are required to keep patient records for extended periods of time.

There are far too many rules to try to cover in this article, so always—always—check with your accountant or attorney if you are unsure what to destroy.

Retaining Tax Records Generates the Most Questions and Stress for SDD’s Clients.

There aren’t many documents that businesses produce that contain more sensitive information and get sent outside of the business than tax records.

When you file electronically, for example, isn’t there a moment of near-sheet terror before you hit that “send” button?

There’s no reason to keep tax records longer than is required.

The Internal Revenue Service provides great information on its website. Here are its general guidelines:

“The length of time you should keep a document depends on the action, expense, or event which the document records. Generally, you must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out.

“The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or the IRS can assess additional tax. The information below reflects the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period after the return was filed. Returns filed before the due date are treated as filed on the due date.”

Many customers believe there is a “7-year rule” that applies to the retention of tax records. While a safe guideline, the IRS has more specific rules depending on your situation (https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records):

1. Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
2. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
3. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
4. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
5. Keep records indefinitely if you do not file a return.
6. Keep records indefinitely if you file a fraudulent return.
7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

As for specific records you should keep the IRS recommends records that “clearly show your income and expenses”. While a broad statement, the implications are significant depending on your industry, as some industries have stringent rules on record keeping. Here is more information from the IRS: https://www.irs.gov/businesses/small-businesses-self-employed/recordkeeping

There are Important Non-Tax-Related Records that Should be Retained.

While the IRS focuses on records that support your income and expenses, there are many, many, many more records in your files that need a decision made on whether to keep or pitch.

In an excellent article on smead.com (http://www.smead.com/hot-topics/records-retention-guidelines-1394.asp), they provided common sense guidelines for general information.

“Keep everyday paperwork for 3 years. It’s rare that anyone is going to want to see an electric bill or credit card statement dating back more than a year. But, you may choose to keep the following non-tax-related items for up to 3 years for internal use:

• Monthly financial statements
• Credit card statements
• Utility records
• Employment applications (for businesses)
• Medical bills in case of insurance disputes”

Smead also identifies other types of records that don’t easily fit into specific categories, for example:

• Car records (keep until car sold
• Credit card receipts (keep until reconciled on your credit card statement)
• ATM and deposit slips (keep until reconciled on your bank statement)
• Insurance policies (keep for life of policy)
• Pay stubs (keep until reconciled with your W-2)
• Property records / builder contracts / improvement receipts (keep until property sold)
• Sales receipts (keep for life of warranty or life of the item on large purchases)
• Warranties and instructions (keep for life of product)
• Other bills (keep until the payment verified on the next bill)

Onsite Shredding Ensures Your Important Documents are Securely Destroyed.

Holding important documents the required period of time is only half the challenge.

When you are ready to dispose of the documents, Secure Document Destruction of St. Louis recommends onsite versus offsite. The differences between the two are significant:

• Offsite shredding. The service provider comes to your office (or residence), picks up your un-shredded confidential documents and materials, and takes them to a facility to be destroyed. For however long it takes that truck to get to the facility puts your important information at risk. The offsite service truck may make as many as 15-20 additional customer stops.
• Onsite Shredding by SDD of St. Louis. SDD’s onsite document shredding services for businesses or onsite shredding services for residences eliminate the risks of offsite shredding. We use state-of-the-art mobile shredding service trucks that shred your documents in real time, in full view within feet of your business. SDD’s bonded, uniformed Security Specialists are there monitoring every step of the process. When we leave your office, your important information is destroyed.

Regularly Scheduled Shredding Greatly Reduces Your Risks in Destruction of Important Documents.

Whether your schedule is monthly, weekly or even daily, SDD’s process is secure:

1. SDD places locked containers throughout your facility to hold sensitive materials to be purged.
2. An SDD shredding service truck comes to your office on your schedule.
3. The truck’s automated handling system securely deposits your confidential information into the truck.
4. The contents are immediately destroyed while you watch via closed-circuit cameras. No information leaves your office without being destroyed… ever.
5. You will receive a Certificate of Document Destruction before we leave your office.
6. The destroyed materials are disposed of at a recycling center.

SDD serves clients in some of the most highly-regulated industries which have strict requirements for information security, such as accounting, legal, banking and healthcare.

SDD’s regularly scheduled services offer the most secure and cost-effective way to regularly destroy your important information and materials. Click here today for a no obligation quote.