How Long Should I Keep Financial Records?

Receipts and statements tell the story of your cash flow. Most have no significant importance once you’ve reconciled your account. There are a handful that you do want to hang on to, at least for a few years. Make sure your records are easy to access and kept in a secure place, whether digital or paper.

Tax Returns (including supporting documents/receipts) – keep personal returns at least 3 years after filing (per IRS guidelines). If you file electronically, download a digital copy for yourself. Keep Employment Income tax records for 4 years after filing.

Proof of purchase for valuable assets, keep at least a year after disposing of the item. For warranty or insurance claims, you’ll need to show evidence of purchase. This is really important if you experience a theft, fire or storm damage.

Bank statements, credit card statements and insurance statements you’ll want to keep up to a year. If you purchased something that needs to be documented, keep that statement as long as you have that item. If you had a medical procedure, keep those statements for at least a year after treatment or a year after paid in full.

Some records need to be kept for two years after they’re sold. These include Insurance Policies, Investment Statements (purchases/sales) to establish cost basis, Loan Purchase Agreements, Mortgage Notes and Titles.

Financial documents such as your Will, Living Will, Trust or Estate need to be kept indefinitely and a copy needs to be given to a trusted advisor or family member. Birth Certificates, Marriage License, Passports, College Transcripts and Medical History/Immunization Records should be locked in a safe or safe deposit box.

Start a file and keep adding to it as needed. Clean out old documents that are no longer needed. Keep records backed up for easy access, safe from water or smoke damage.

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