Managing Your Tax Documents - What You Need to KnowRISMEDIA, With the end of the holiday season, comes the start of another—tax season.
With tax season officially underway, tax preparers are working hard to make the season more bearable. That said, according to Florida-based Marshall Stevens of Stevens & Stevens Business Records Management, business owners should not just rely on their tax preparers to handle all the work; there are other things owners should consider regarding tax documents.
"While being organized is important, secure storage, retention and destruction of tax information should also be addressed this time of year," said Stevens, co-owner of the full-service records management center that specializes in tax information management. "Thinking about these areas will protect you if there's an audit or lawsuit and will protect sensitive information from falling into the wrong hands."
Protect tax documents – Since tax documents contain sensitive information, they should be stored in a locked area. Limit access to select personnel and password protect the electronic files.
Retain tax information – Typically, tax information must be kept for three years as the IRS can perform an audit at any time during this period. But, if there's any question with filed information, they can perform audits past this mark. Choosing a secure, climate-controlled location is essential to protect your company in the event of an audit.
Secure destruction – To protect your business from falling victim to identity theft, shred everything. While a small office shredder may work for some offices, most businesses will need to seek the services of a company that specializes in secure destruction.
Simplify things for next year – Convert all tax-related documents into electronic formats. These files can be housed on a secure, password protected website for quicker access and automatic monitoring of retention periods.