I was checking out my storage area and realized that I haven’t revisited my old papers in a while so recently I went through the old bins and started shredding lots and lots of papers. The thing about paper is that it doesn’t take a lot of room and I can easily place it somewhere and let it collect dust. But, this is not necessary. The IRS doesn’t need us to keep every single piece of paper that ever crossed our desk.
As a small business owner, we need to be more conservative with getting rid of paper but we don’t have to keep every single piece. The IRS suggests to keep the papers for 6 years if you have a small business but I prefer to keep it for 10 years, just in case. If you want more detailed information from the IRS, check out their website: How Long To Keep Records.
Does my small business have to shred documents and papers?
YES! It’s the law and your responsibility as business owners. Just because you may be a one-person small business, doesn’t mean you are exempt. You must shred any of the following documents and any papers that would relate to Fair and Accurate Credit Transaction Act (FACTA) and Health Insurance Portability and Accountability Act (HIPAA). Making this a regular practice protects everyone involved.
Shred Important Small Business and Personal Paper – Here is a list of papers and documents that are more sensitive and that must be shredded when you are ready:
Bank Receipts
- ATM receipts/Bank Statements – old expired cards. Closed accounts should be shredded too.
- Canceled and Voided Checks – Any canceled and voided checks need to be shredded especially if you have check images on your banks statements.
Credit Card Papers
- Credit Report – older copies of the credit report. Only keep the current copy for your records.
- Pre-approved Credit Card Applications – Shred any pre-approved credit card applications you get, especially if you don’t want them.
Other Documents
Medical and Dental Records – Any old records of your family and friends.
Legal Documents – Any old contracts or legal records that aren’t being used and are very old.
Investment Stock Transactions / Investment statements – You can keep the end of year summary transactions, but the individual entire years can be shredded. Also, if you access to online accounts, you do not need to keep paper copies of any account. Check your bank statement online first before shredding any papers.
Employee Records – Wait a year or two after a person leaves the company to shred any paperwork that has information for your employees.
Employee Paystubs – After you get the last statement of the year and it is OK, you can shred the rest of the pay stubs.
To add to the list above, here are other papers and documents you should shred to protect your personal life as well:
- Address labels from junk mail and magazines
- Pre-approved credit card applications
- Birth certificate copies
- Personal Canceled and voided checks
- Credit card bills
- Documents with your previous name on it
- Papers with old address, phone numbers, and email addresses on it
- Papers with pins on them
- Old Driver’s licenses and anything with your driver’s license number on it
- Expired passports and visas – keep the most recent expired passport just in case your valid one gets lost or stolen
- Old IDs like college IDs, state IDs, employee ID badges, military IDs
- Old Legal documents
- Any document with a signature – leases, loans, contracts, letters
- Unused luggage tags
- Documents with Social Security numbers on it
- Report cards
- Resumes
- Tax returns and documents / letters
- Used Travel details
- Used Airline tickets
- Utility bills – telephone, gas, electric, water, cable, internet, cell phone
What shredder to buy?
There are lots of shredders in the market. There are straight-cut are usually the less expensive because it is not as secure.
I prefer the larger freestanding cross-cut or micro-cut ones. I can shred the entire junk mail envelope into it and don’t have to separate the pages that just get recycled and the ones that get shredded.
How often should I shred?
After taxes were submitted is a great time to shred old tax documents. By doing this at this time, you can save space and reuse the boxes that were already stored away, thus saving space in your storage area.
I hope this helps you get rid of old papers, let’s take a poll. How often do you shred your documents? How many years of documents do you keep? Please share below. Thank you.
I would love to have a shredder and will probably invest in one sooner than later. Right now I rip things into tiny pieces. It’s a good thing I don’t have a lot to rip 😉
You didn’t leave much out in your list. So I guess it’s best to shred everything that has your signature and other personal information. I didn’t know the law required shredding certain documents. Thanks for the tips.
I think I really just need a super-duper shredder. I ponder over mail like pre-approved credit cards trying to separate the potentially damaging from the mundane – and then just shred the application, etc. All this is an effort to keep from shredding because my shredder is, I think, the first one ever made. Honestly, I believe there may be a tiny little Italian man in there with a single pair of shears cutting my documents by hand. It’s that fast. Then it gets jammed, and I have to sit down with the shredder’s top piece and a tweezers … if I moved up to a varsity-team shredder, it would probably pay for itself in cuts from my current Tylenol costs.
Hi Sabrina 🙂
Thanks for these awesome post on what needs to be shredded for business owners and for personal use as well! I have always wondered what needed to be shredded after a certain amount of time 🙂
Believe it or not, I actually DO have a shredder that is just sitting collecting dust lol 😉 Gonna be pulling that little tool right back out!
Now I have a list to refer back to when I need to know….Thank you 🙂
Thanks for offering clarity on this, because I never really knew all that “should” be shredded.
Fantastic list & great reminder topic. I see we all do some shredding but not in all the categories you listed & probably not as often.
I do need to schedule time to do more. TV commercial time is good.
Lots of shredding to be done! I try to stay on top of shredding / weeding out old docs, but it seems I’m in a losing battle. Thanks for including such a broad list of documents that should be shredded – good reminder for all of us.
Great list of items to shred. Until recently I never thought of shredding my airline tickets. Apparently, there is a lot of coded information about you on it. Guess, I better start updating my shredding practices. Thanks.
I don’t shred often enough…only when my files get stuffed. I appreciate hearing about how long the IRS wants you to keep business stuff, but when it comes to “old” personal records…how old is that? I have an old press pass that I just refuse to get rid of. It’s like a personal memento from my earlier life. And when I comes to resumes, I will not shred those. They live on my computer and the old versions have come in handy if I need a specific reference to a long-ago position or job duty that I need to use in current information.
Thanks for mentioning those pre-approved credit applications. One of my friends was turned down for a loan because of outstanding debt on a card she didn’t even have, because someone else obtained it in her name. Sadly, we really need to be cautious!
I have shredding days every now and then, Sabrina. Followed with chocolate as a reward for a hard day’s work. It is important to treat confidential materials with respect. Just ask anyone who has had their identity stolen.
This is very valuable information. So many people are the victims of identity theft and they only find out when it is too late (I usually see it when they are applying for a loan).
I try to shred as I go.. but when I do my annual taxes I cleanse extra papers… and luckily local banks have a shred day… I take advantage.. but great course.
Oh wow, I didn’t realise it was the law that you had to shred business documents. I wonder if the same rule applies in Australia? I’m going to check it out. Shredding is such a good idea anyway, even for personal documents and your list of what to shred is really helpful.
Definitely a good practice for sure. We don’t have a shredder but hubby makes a regular practice of burning – but probably not the safest choice.
The thing that made a difference to me to shred was getting a good, powerful one. When I had this little thing on my trash it was a pain and I never did it. Now, I shred all the time. Actually find the noise is a de-stressor for me. Those that you recommend look like they would be easy to use.
My “shredding” is actually me ripping all my old papers into shreds and I’ve been looking at shredders and there is quite a wide-range of prices and capabilities. I thought it was okay to just tear papers in fours and scramble them up in my recycling bin. Although I am getting rid of the right things, I think if I want to be “safer”, probably a shredder is a great idea. As I am in Canada, we have so many different models than you do in the U.S. And our prices are considerably higher too! Thanks for sharing, Sabrina. It is really info we all would be wise to take note of.
I have been shredding practically everything for years. Anything with so much as our name gets shredded.
Very helpful, Sabrina. I know I need to do this more often. I was really good at doing so for a long time, but have lapsed. Will get back to it–thanks for the kick in the rear to get me going!
WOW, I honestly had no idea. Frankly, I recycle most everything but don’t shred.