What Documents Do I Need To Keep On File?
Proper record-keeping is crucial for individuals to manage their finances effectively. Maintaining a well-organized record of important documents and information can help them to make informed decisions, file accurate tax returns, and stay prepared for any potential future events that may require documentation.
The first category of documents that individuals should consider retaining are tax documents. This includes past tax returns as well as documents related to specific transactions, such as annual gifts made to children, relatives, or others. These records are essential for individuals when filing their tax returns, and they can also be useful if they need to provide documentation for any financial or legal matters.
The second category of documents is related to healthcare records. These records can be critical when applying for Medicare or when substantiating medical deductions on prior tax returns. Individuals should also retain records of any contributions to, and distributions from, a health savings account (HSA).
Legal documents are another category that individuals should consider keeping in their files. These documents can include proof of their citizenship or military service, estate planning instruments such as a Will, Trust, and Powers of Attorney, and records surrounding their marriage or their divorce. These records are essential for individuals when navigating legal and financial matters.
The fourth category of documents is related to assets and debts. Individuals should retain statements and disclosures for investment accounts and employer-sponsored retirement accounts, business records such as the company EIN and documents of formation and operation, student loan and mortgage statements, and titles to automobiles and real estate, among others. These records are important when tracking the growth of assets over time and managing debts.
Finally, individuals should consider retaining copies of any insurance policies and relevant paperwork, employment contracts, and proof of professional certifications that they may hold. These records can be useful in case of any disputes or questions that may arise.
In summary, this comprehensive checklist covers the types of documents that individuals need to consider retaining in their files to ensure proper record-keeping and to stay prepared for any potential future events that may require documentation.
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Robert J. Pyle, CFP®, CFA, AEP® founded Diversified Asset Management, Inc., in 1996 to provide personalized, comprehensive wealth management services to successful individuals, families, single women, and business owners. His specialty is addressing the complex financial needs of self-employed professionals, corporate executives, and small-business owners. Our disclosure can be found here. The views, opinion, information, and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting, or tax advice.