Tuesday, March 14, 2006

Tax Paperwork: Important Documents or an Identity Thief's Dream?

What to Keep and What to Shred This Tax Season

If you're like most people, you spend more time organizing the closet than your financial records. After all, knowing when to get rid of clothes is a lot easier than knowing the rules for how long to keep tax returns, or better yet, whether or not you should be keeping receipts and credit card statements.

Unfortunately, as identity theft crimes continue to grow, we're living in a time where one person's trash is another person's treasure. As Americans sort through mountains of paperwork this tax season, it's important to not only understand IRS rules, but also protect personal information from would-be identity thieves. Last year, consumers lost nearly $57 billion to criminals who stole their identities - a scary thought as we discard old documents and fill up our garbage cans prior to April 15th.

Although it may seem easiest to keep financial records indefinitely, an overflowing desk drawer or filing cabinet makes it nearly impossible to access documents when they're needed. It also increases the likelihood of accidentally misplacing sensitive documents that can lead to identity theft.

"It's important to understand which documents need to be kept and which need to be shred to avoid having personal information fall into the hands of an identity thief," says Kristen Gehrig, senior marketing manager for Fellowes, Inc., the leading shredder manufacturer. "Shredding sensitive documents has become a home necessity these days."

To conquer the stacks of paper that inevitably accumulate in every household, it's important to understand what you need to keep and what you can safely shred:

For documents you need to keep, consider storing them in a safe and accessible place, such as a fireproof box in your home. When destroying records, it's best to use a shredder that can slice credit cards and has cross-cut (also known as confetti-cut)capabilities, such as the Fellowes' Powershred DS1. Identity thieves can't steal what they can't read, and cross-cut shredders ensure that private information is destroyed into small, unidentifiable pieces. The Fellowes DS1 is recommended by groups such as the Good Housekeeping Institute because of its Safe Sense™ Technology, which shuts down the shredder when it senses that hands are too close to the paper opening, thus alleviating child safety concerns with a shredder in the home.

Additionally, a few more protective measures against identity theft should be taken during tax season. Take tax forms directly to the post office; do not leave them in a private mailbox where they're accessible to a potential neighborhood thief. Also, be sure to shred any paperwork needed to calculate taxes such as receipts, bank records and various forms. If you choose not to do your own taxes, be very selective of whom you hire. Conduct research on tax companies and ask questions, including how information will be stored, shared and disposed or destroyed.

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