How to properly dispose of an American flag:
1. Make a small bonfire in a safe place where it is legal to burn.
2. Carefully remove the flag from its current setting and respectfully place it on the fire. Do not burn other items at the same time.
3. Take a moment to respect the flag. This is a solemn event. Do not joke or chat. Do not talk or text on a cellphone.
4. Say the Pledge of Allegiance.
5. After the flag is consumed by flame, make sure the fire is safely out.
Shredding and then burying the flag is an acceptable methods as long as it is done with dignity and respect. However, a mechanical shredder is not recommended. The flag should be cut with scissors but only the red and white stripes should be cut. The star-filled blue field should remain intact. After shredding, the remains should be buried in a proper container in a proper spot.
Source: United States flag code