Did you shudder when you first heard the experts pronounce we’d be a paperless society one day? Do you laugh now when you hear someone make the same announcement, mainly because based on experience, you know that it’s probably not true…or at least it won’t be for quite some time?
My love affair with paper started at an early age. Sure, I enjoyed coloring, but what I really looked forward to each Christmas and birthday were the gifts of paper I received. Note cards I could send throughout the year. Boxed sets of stationery that contained sheets of writing paper with a hint of fragrance. As I grew older, I found joy in notepads of all sizes, writing tablets, and address books. I even had one of the plastic, 1970’s era flip top address organizers. Eventually, I graduated to a Rolodex when those were in vogue.
Today, I find comfort in manila and hanging file folders. I also have a sweet spot for Moleskine and pens that don’t make blotches on paper. And I like the month of January, not because of snow, but because it’s the time when nearly every retailer changes from holiday gift and decor displays to aisles of filing cabinets, calendars, white and bulletin boards and all things paper.
I always chuckle to myself…so much for being a paperless society.
The displays also usually include shredders. Small ones that will handle a few sheets at most, but also larger shredders that can successfully navigate things like staples and up to 25 pages of paper at once.
Yes, there’s a certain amount of satisfaction that comes from owning a good shredder that doesn’t bind and is willing to eat the credit card offers received in the mail.
Which brings me to the point of this post. It doesn’t matter whether your files are digital, paper or a combination of the two. There will come a time when you need to think about shredding them. But before you shred your paper files or delete your digital ones, you need to ask yourself, “Can I shred this?”
Unfortunately, there is no quick answer to that question because data retention requirements vary depending on the type of file, where one lives and whether the file is personal or for business. There are federal and state requirements that one must consider, but also regulations that govern different types of businesses.
So, before you decide to tidy up (and hire someone familiar with The KonMari Method to help you), why not take a look at the list below. It’s not exhaustive, nor is it meant to be definitive. When in doubt or if you have a complicated life, you should always consult with a legal and/or accounting professional before making a decision that can’t be reversed.
IRS Guidelines for Small Business/Self-Employed
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Record
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Retention Period
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Records when you report all income, file returns, and don’t file fraudulent returns
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3 Years
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Records from date of original return or from date you paid tax, whichever is later
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3 Years (original return)
2 Years (date paid tax)
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Records if you claim for a loss from worthless securities or bad debt deduction
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7 Years
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Records if you don’t report income you should, and it is more than 25% of gross income on return
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6 Years
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If you don’t file a return
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Indefinitely
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If you file a fraudulent return
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Indefinitely
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Employment records (after date tax is due or paid, whichever is later)
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4 Years
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The US Employment Opportunity Commission requirements apply to all employers covered by Federal anti-discrimination laws.
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Record
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Retention Period
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All personnel and employment records
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1 Year
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Records for employees involuntarily terminated
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1 Year from date of termination
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Payroll records
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3 Years (under ADEA)
1 Year (after termination and throughout for employee benefit plans/written seniority or merit systems)
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Records that explain basis for paying different wages to employees of opposite sexes
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2 Years (under Fair Labor Standards Act record keeping requirements applicable to EPA)
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Oh, and if you are deleting digital files, don’t forget to “wipe” the free space on the device.