5 tips to protect your financial documents at tax time

Tax Time Sticky NoteConsider the Heartbleed virus as your wake-up call to get serious about protecting your private information, especially at tax time.

Whether it’s your emails, social media posts or personal/business records, Heartbleed is a reminder of how vulnerable you are when you’re online.

But there are other culprits — fire, flood and theft — just as eager to snatch away your private data.

So how do you keep your financial data safe?

Ensuring your private information is safe and secure is up to you. As you prepare to file your taxes, you’ll want to consider putting some systems in place to protect your financial records.

Here are 5 tips you can use to protect your financial records at tax time

1. Go digital

Moving from paper to digital documents is the first important step in protecting your financial records.

Sign up to receive your documents electronically. If that’s not possible use a scanner to digitize the paper documents. (Tip: scan the paper documents as you receive them.) If you don’t have a scanner, use your smartphone’s camera to take a picture and save it either as an image or use an app like Jotnot to convert it into a PDF.

2. Back up

If you’ve been part of my community for awhile you know I’m always nagging you to back up your data. So here I go again …

If you find it impossible to get into the habit of scheduling regular backups of your computer files try storing your data securely in the cloud. Many cloud-hosting services enable you to access and manage your files from anywhere using any device. If you’re not comfortable having your files stored remotely, you can back them up to an external hard drive or flash drive for safe keeping.

3. Keep records for 7 years

Typically, the timeframe for keeping your personal and financial records is seven years. Be sure to check with your accountant or your country’s relevant government agency for the standards and guidelines for document retention.

4. Dispose responsibly

When it comes time for you to get rid of your financial documents, shred them using your office shredder or a shredding service. Tossing them into your office garbage bin puts you and your business at risk for identity fraud.

5. Protect your papers

If you’re not comfortable going digital with your financial documents, then make sure you take the necessary steps to protect your paper records. Store them in a secure, fireproof safe or security box. Consider storing them offsite with a document management company.

Your Next Steps

Make protecting your financial information a priority in your business. Create a system for collecting, digitizing and organizing your records. Keep it simple and easy to follow. This will ensure you (or your team) will maintain and sustain the process.

If you need some help mapping out the flow of your financial documents from the moment you receive them until they’re stored safely and securely, I’m here for you. Send me an email (valeri @ intandem.ca) or leave a comment below.

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