The safe way to save your tax files from years past (do this now!)
We’re down to the eleventh hour: Tax Day is coming up on April 18. If you’re one of the millions of Americans filing electronically, watch out! A popular e-file tax site was caught spreading malware for weeks. Here’s what you need to know.
Do you keep copies of important personal documents? If not, tax season is a great time to begin.
How long should you keep tax records?
The IRS recommends keeping your returns and any supporting documentation for three years after the filing date or two years from the date you paid the tax, whichever is later. After that, the statute of limitations for an IRS audit expires.
The number goes up to six years if you do not report income that you should, and it is more than 25% of the gross income shown on your return. Important documents are not just limited to taxes. Think car titles, living wills, insurance papers, business licenses and property deeds. You get the idea.
Here are a few ways to safely keep your records.
RELATED: Preparedness tip: How to digitize your most important documents
Store critical files on your computer
Storing records locally means you know exactly where they are at any time and can access them instantly. But there are drawbacks:
- If your hard drive fails, you could lose everything.
- A hacker who gets into your computer could access those documents and learn far too much about you.
You could store everything in a removable hard drive or thumb drive and keep it in a safe place. It won’t make your data immune to hard drive corruption or house fires, but at least no one can access it when disconnected.
If you go the local route, you’ll need encryption. 7-Zip is free software that lets you encrypt and compress files. Here’s how it works:
Security tip: How to choose and install cameras that upload right to the cloud
Picture this: You’re sleeping soundly in your bed one night. Suddenly, shattering glass jerks you awake. If a burglar’s combing through your home and snatching up your valuables, your mind’s probably racing 100 miles per hour.
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Storage space comes at a premium, whether it’s price or simply having room for all of your important stuff. Your phone, computer, tablet, laptop and other devices all have limited storage space and if you want more, be prepared to shell out for it.