How to Store Paper and Digital Tax Records
Australian law requires you to store records of any tax paid for five years. If you only need to store your personal tax records, you may be able to use a home filing cabinet. However, if you operate a small or medium sized business, it is likely you will not have space at home or in your workplace to store tax paperwork and other information. If this is the case, you should consider hiring a self-storage unit. Below are some things you should consider when planning to place your tax records in storage.
Tax documentation consists of much more than just your returns; it will also include receipts which document any expenses you have claimed, payroll information, bank statements and other items. These paper records are particularly at risk of being damaged or destroyed by water or fire damage in a storage unit.
There are some steps you can take which will help to protect your paper records:
- Climate Control: A climate controlled storage unit will help to keep your paper tax records dry.
- Fireproof Box: You should invest in a fireproof metal box. These boxes are specially insulated to protect paper documents from the heat generated by a fire.
- Shelves: Do not place important documents on the floor. You should store any boxes of important documents on shelves. Doing so will help to protect them if the unit suffers flood damage.
Most modern businesses will carry out a large proportion of their accounting using computers, as this allows for the easy generation, storage and retrieval of tax information. Digital records also take up a lot less space, meaning you can store a filing cabinet of information on a small USB drive.
However, it is important that you take steps to protect and preserve digital records on any old computers, USB drives or CDs. These steps are:
- Backup: You should make a backup of any digital information and keep it in a different location or on a cloud service. Doing so will allow you to retrieve the information if the original storage devices become corrupted.
- Humidity Protection: Electronic storage devices can be particularly sensitive to moisture and humidity. You should only store this type of material in a climate controlled storage unit.
- Static Electricity: Static electricity can cause damage to hard drives and USB sticks. You should place each digital storage device in a static proof bag to protect it.
If you would like further information about how to store paper and digital records, contact a storage company today.