Lock down the data

 As you generate W-2s and 1099s for employees and contractors, consider taking some additional time to evaluate the safety of this sensitive information. Paper and digital files alike should be handled carefully. Shred or archive old information, and make sure nothing is inadvertently stored online where shared access is available. And here's a simple, but often overlooked, fix: Keep your operating system up to date, as they are periodically updated to fix security holes.

Privacy laws and common sense dictate that you take action to protect information about your employees and independent contractors. As the deadline approaches for providing W-2s or 1099s to workers, it’s important to safeguard keep security of their Social Security numbers and other sensitive information.

eFile4Biz, an IRS-authorized e-file provider for online processing of 1099s and W-2s, shares these guidelines:

• Keep only the information you need. Eliminate or archive older data.
• Set routine procedures for tasks, such as when/how to dispose of tools that contain house sensitive info.
• Protect paper documents from a security breach or identity theft. Lock cabinets in which papers are kept.
• Keep an inventory of your information sources. Make sure as a small business owner you know where your important data is at all times.
• Review your network setup. Protect your business with a strong firewall and strong security programs.
• Provide access to information only on a “need to know” basis. Protected information includes not only employee/contractor data, but also your passcodes.

It’s also a good idea to use encryption when you transfer data via email. If so, give the password to the recipient by phone or a separate email.

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Bob Lancaster Insurance

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