Experts Warn Taxpayers from Keeping Old Tax Receipts in Shoe Box

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To support tax credits and deductions claims from the IRS, you should retain copies of your tax returns and supporting papers for several years. Because these documents include sensitive information, their loss or theft could result in identity theft and financial impact. For example, your old shoebox full of records could easily be turned into a tax-related identity theft offense by a thief.

Identity Theft Alarming

When someone uses your financial details without your permission, this is known as identity theft. Your name and address, credit card or bank account details, Social Security number, or medical insurance account numbers could all be stolen. And according to the Federal Trade Commission, they could use them to buy things with your credit cards, get new credit cards in your name, open a phone, electricity, or gas account in your name, steal your tax refund, use your health insurance to get medical care, and falsely claim to be you if they are apprehended.

According to Norton, this is a significant offense that could lead to even more problems in the future if thieves obtain enough personal details about you to submit a false tax return in your name. Because tax identity theft is such a huge problem, the Federal Trade Commission holds Tax Identity Theft Awareness Week every year on the last Monday in January. The week will begin on January 31st, 2022. The FTC hosts a series of seminars throughout the week to teach consumers how to spot and avoid tax identity theft.

The IRS has partnered with state revenue agencies and the tax industry to ensure that you are aware of your personal and financial information threats. The IRS stated that working in tandem with you; we can make a difference.

Simple, Useful Ways to Avoid Identity Theft 

As a result, the IRS has listed some practical and straightforward precautions you can take to protect your tax data better. For example, keep a copy of your completed federal and state tax returns, as well as any supporting documentation. These prior-year returns will assist you in preparing your taxes for the next year, and receipts will document any credits or deductions you claim if there are any questions later. For example, if you store paper records, keep them in a secure area, preferably under lock and key, such as a safe or a locked desk drawer.

If you keep your records on your computer, you should always have an electronic backup plan if your hard drive fails. Encrypt your files on your computer and any backup disks you use. To secure the safety of the files, you may need to buy encryption software. Properly dispose of obsolete tax records. You should never throw paper tax returns and related papers away. Before discarding your federal and state tax records, as well as any financial or health records, shred them.

If you’re getting rid of an old computer or backup hard drive, remember that it may contain important information. For example, deleting stored tax files will not remove them from your computer. To ensure that you remove all personal data from any electronic product you trash or sell, including tablets and mobile phones, you should erase the drives. Once again, necessitate the use of specialized disk utility software.

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