What documents to keep on file in 2023?

April 24, 2023 Author: Tess Downing, MBA, CFP®, Complete View Financial

In today's world, it's crucial to maintain proper documentation for various purposes, including legal compliance, financial record-keeping, and personal reference. It's important to know what essential documents you should keep on file in 2023 to ensure you have the necessary paperwork in case of any unexpected events. Maintaining proper documentation can save you from unnecessary trouble in the future. Here's a quick checklist with an overview to discuss the essential documents that you should keep:

Tax Documents

Are you filing income tax returns? If so, consider the following:

Keep at least three years of state and federal tax returns and supporting documentation on file. Supporting documentation includes records that prove any income, deductions, or credits claimed (W-2, 1099, end-of-year statements from banks, and investment accounts).
Depending on the state (like CA), you may need to keep tax returns for longer than three years.
If you think you forgot to report income and it’s more than 25% of gross income, keep six years of tax returns on file.
If you are claiming a loss for worthless securities or bad debt deduction, keep records for seven years.
Keep all W-2s until you begin collecting Social Security.

Have you made taxable gifts or received an inheritance? If so, keep all 709s that you file, and any 8971s or 706s issued to you, along with any supporting documentation in your permanent records.

Healthcare Documents

Will you apply for Medicaid (perhaps due to long-term care expenses)?

If so, keep all financial statements and records of transactions for the previous five years to support your application for Medicaid, as there is generally a five-year look-back provision.

Do you have a Health Savings Account (HSA)?

If so, keep all medical receipts from the date the HSA was opened.

Did you write off medical expenses on your tax return?

If so, keep records for as long as you keep your tax returns (generally three years).

Are you on Medicare? If so, consider the following:

Keep your Medicare Summary Notices for at least a year, or until your bill is paid in full.
If you are enrolled in an employer drug plan that is considered creditable, keep your annual “Notice of Creditable Coverage” provided by your employer. This is needed if you enroll in Part D at a later time.

Legal Documents

Are you a U.S. citizen?

If so, keep a copy of your Social Security card, birth certificate, and passport.

Are you a foreign national?

If so, keep all documents related to your entrance into the United States, such as your passport, Green Card, and I-94.

Do you have an estate plan?

If so, keep a copy of your Will, Trust(s), Powers of Attorney (General and Health Care), Living Will, and beneficiary designations on file, and store the originals in a safe place. Also, consider giving copies to people that play an important role in your estate plan, such as your agents, Executor(s), and Trustee(s).

Are you currently married?

If so, keep your marriage certificate on file, which may be needed in case of a name change, proof of marriage for insurance benefits, and for obtaining a joint mortgage. If you have a prenuptial agreement, store your original copy in a safe place.

Have you been divorced?

If so, keep your divorce papers on file.

Have you served in the military?

If so, keep your military discharge papers as they may be needed to prove your eligibility for veteran’s benefits.

Do you have a safe deposit box?

If so, keep the necessary information to find and access the safe deposit box.

Asset and Debt Related Documents

Do you have any investment accounts or bank accounts? If so, consider the following:

Keep the most current statements on file (paper or electronic).
Keep the End of Year statement on file until you complete your tax return.
If you own investments purchased before 2012 (the year that custodians were required to track cost basis), keep records of what you paid for the non-covered investments in the event you sell them in the future, as 1099 may not report cost basis.

Do you maintain any retirement accounts? If so, consider the following:

Keep documentation on any contributions and withdrawals.
If you took a Coronavirus-Related Distribution, keep your withdrawal request and 1099-R.
If you made a Roth conversion, keep records showing the conversion.
If you made non-deductible traditional IRA contributions, keep Form 8606 until the account is fully withdrawn to track the cost basis.

Are you a small business owner? If so, keep the following:

Federal EIN, business formation documents, ownership agreements, and any business licenses.
Payroll records, employment tax records, and receipts for all expenses.
Business asset records, such as purchase and sales invoices, deeds, and titles.
Records of employee benefits, such as retirement plan documents.

Do you have any debts (student loans, mortgages, etc.)?

If so, keep the loan documents until the loan is paid off. Once the loan is paid off, keep documentation on file proving that the loan has been paid in full.

Do you own property (automobiles, real estate)?

If so, consider the following: Keep any deeds, titles, settlement statements, or bills of sale on file until you decide to sell the property.
Keep documentation showing purchase-related fees that were capitalized on file until you decide to sell the property.

Are you self-employed and do you deduct home office expenses?

If so, keep all receipts for any housing/home office-related expenses (such as utility bills and mortgage statements) to prove the home office deduction.

Have you made any improvements to your home?

If so, keep any receipts related to the home improvement as they may be used to substantiate any adjustments to the cost basis for your property.

Do you own real property in multiple states?

If so, keep detailed records proving which state you lived in for the majority of the year (receipts, or travel itineraries). It is especially important if you are concerned about your state income tax liability and/or establishing residency.

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