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What documents do I need to keep on file?

Updated: Jun 7, 2023

Clients are often confused as to what documents to keep in their files. Records relating to tax and legal matters, healthcare issues, assets, and liabilities, as well as other important transactions should be kept in case they are needed in the future.

In this checklist, we cover a number of documents that your clients need to consider keeping in case they encounter any number of issues, including:

  • Various tax documents, including past tax returns as well as documents related to specific transactions, such as annual gifts made to children, relatives, or others.

  • Healthcare records, including those relating to Medicare eligibility, substantiating medical deductions on prior tax returns, and confirming any contributions to, and distributions from, a health savings account (HSA).

  • Various legal documents, including proof of your client’s citizenship or military service, estate planning instruments (e.g., Will, Trust, and Powers of Attorney), and records surrounding their marriage or their divorce.

  • Documentation regarding certain assets owned and debts incurred by your clients, including statements and disclosures for investment accounts and employer-sponsored retirement accounts, business records (e.g., the company EIN and documents of formation and operation), student loan and mortgage statements, and titles to automobiles and real estate, among others.

  • Other types of documents such as copies of any insurance policies and relevant paperwork, employment contracts, and proof of professional certifications that clients may hold.

This is a comprehensive checklist of the types of documents that clients need to consider retaining in their files.

Welcome back to another informative checklist provided by Todd Pouliot, Gateway Financial. Today, we delve into the topic of document management and explore the crucial records you should keep on file. It is common for individuals to feel overwhelmed and uncertain about which documents to retain. By maintaining organized records of tax information, legal matters, healthcare documents, asset details, and other important transactions, you can be prepared for any future needs. In this checklist, we will cover various document types, including tax documents, health care records, legal paperwork, and more, emphasizing the significance of secure storage options like Gateway Financial's client vault. Let's dive in!

Tax Documents:

When it comes to filing income tax returns, it is advisable to keep all supporting documentation for at least three years. Nowadays, many accountants offer digital storage solutions, allowing you to store and access your tax documents conveniently. Specifically, ensure you retain all W-2 forms until you begin collecting social security to verify the accuracy of your benefits calculation. For claiming losses related to worthless securities or bad debt, retain the relevant records for seven years.

Health Care Documents:

If you anticipate applying for Medicaid, it is crucial to keep financial statements and records for the previous five years. Stay updated on any changes in legislation that may require a longer retention period. Additionally, for health savings accounts (HSAs), preserve all medical receipts from the date the HSA was opened. Delay using your HSA for medical expenses until later in retirement to maximize its benefits. Moreover, if you write off medical expenses on your tax return, ensure you keep the tax returns and supporting documents mentioned earlier.

Legal Documents:

Certain legal documents require careful preservation. For U.S. citizens, keep important identification documents such as your social security card, birth certificate, and passports. If you have an estate plan, retain a copy of your will, trust, power of attorney, living will, and beneficiary designations. Store the originals of these documents in a secure place and share copies with individuals who play significant roles. Gateway Financial provides a vault for clients to upload important documents, ensuring a secondary backup copy for added security.

Marriage, Divorce, and Military Documents:

If you are married, keep your marriage certificate on file, which can be safely stored in your client vault. For individuals who have prenuptial agreements or have gone through a divorce, maintain copies of the relevant legal decrees and agreements. Military records, such as discharge papers, are important for veterans to establish eligibility for benefits.

Asset and Debt-Related Documents: For investment and bank accounts, retain the most current statements and end-of-year statements until you complete your tax return. If you have retirement accounts, keep documentation of contributions, withdrawals, and any conversions, such as Roth conversions. Pay attention to any non-deductible traditional IRA contributions and retain Form 8606 until the account is fully withdrawn to track the cost basis. Small business owners should maintain records such as EIN (Employer Identification Number), payroll records, employment tax records, asset records, and employee benefit documents.

Debts and Property Documents:

For student loans and mortgages, keep loan documents until they are paid off and retain proof of payment in full. In the case of property, including automobiles and real estate, keep documents like deeds, titles, settlement statements, and bills of sale until you decide to sell the property. If you have a home office, retain utility bills and mortgage statements to substantiate home office deductions. Furthermore, keep receipts for any improvements made to your home, as they may impact the cost basis of the property. Detailed records and travel itineraries are essential if you own real property in multiple states and need to establish residency or address state income tax liability.

Other Important Documents:

Maintain records of your college degrees and certifications to prove your educational achievements. Keep the most current versions of your insurance policies, such as homeowners, disability, and life insurance, ensuring they are easily accessible. If you are employed, retain copies of any contracts you sign with your employer, including non-solicit or non-compete agreements.

Storing and organizing important documents is crucial for maintaining financial and personal security. By following this checklist and retaining the necessary documents, you can be well-prepared for any future needs or inquiries. Utilize secure storage options like Gateway Financial's client vault to ensure the safety and accessibility of your important records. Remember, keeping your documents in order today can save you time, stress, and potential complications in the future.


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