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Document Retention Best Practices Thumbnail

Document Retention Best Practices

In order to stay organized as well as protect your personal confidential information, periodically reviewing your personal and business documents for which you maintain hard copies is an important task. However, given the wide array of documents that any household can have, determining which documents to keep and which to dispose of can be difficult and overwhelming. The below list is intended to be a general document retention guide rather than a definitive rule book, and whether a document should be kept or not ultimately depends on your individual situation and the nature of your business. It’s worth remembering that most documents today can be safely digitized with the originals shredded, however, there are still a handful of documents for which it is best to keep the originals as highlighted below. 

Personal Documents:

  • Documents to Keep for Seven Years
    • Tax returns (unless you don’t file a return, in which case keep records permanently)
    • Forms W-2, 1099, and medical expense records
    • Cancelled checks, bank deposit slips, bank statements, and credit card statements
    • Charitable contribution records
    • Utility records (only need to be kept if being used to prove income tax deductions)
  • Documents to Keep While Policies/Products are Active
    • Health insurance
    • Home, auto, umbrella and other property insurance
    • Life and long-term care insurance (keep until there is no chance of reinstatement of the policy)
    • Passports
    • Warranties (keep for as long as items are owned or until warranties have expired)
    • Vehicle records
  • Documents to Keep for the Ownership Period + Additional Seven Years
    • Investment purchase and sale records
    • Dividend reinvestment records
    • Year-end brokerage account and mutual fund statements
    • Home purchase documents
    • Home improvement receipts 
    • Loan records 
    • Accident reports and claims
  • Documents to Keep Permanently (items italicized should have their original copies kept)
    • Birth certificates, Social Security cards, and death certificates
    • Adoption paperwork and citizenship papers
    • Education and professional license records and degrees
    • Military records
    • Marriage licenses and divorce decrees
    • Wills, trusts, powers of attorney, and advance medical directives (these should be kept forever or until nullified by updated versions)
    • Retirement plan individual reports
    • IRA nondeductible contribution records (Form 8606)
    • Medical records

Note: Documents related to your relationship with Harbor Group, such as quarterly management reports, correspondence, and financial analysis, do not need to be kept as we maintain permanent copies of these records.

Business Documents:

  • Documents to Keep for One Year
    • Deposit slips and purchase records 
    • Communications with vendors and customers
  • Documents to Keep for Three Years
    • Employee records and employment applications
    • Insurance policy records
    • Internal audits
  • Documents to Keep for Seven Years
    • Accident claims and reports
    • Accounts payable and receivable ledgers
    • Bank account statements and cancelled checks
    • Employment tax records
    • Expired leases and contracts
    • Inventories and sales records
    • Payroll records and pension summaries
  • Documents to Keep Permanently
    • Articles of incorporation, charters, and by-laws
    • Year-end financial statements
    • Third-party audits
    • Bills of sale, deeds, property appraisals, and property records
    • Active contracts and leases
    • Retirement plan and pension records
    • Trademark and patent registrations
    • Legal communications and records
    • Depreciation schedules

We hope this list is helpful to get you started on your document organization. For certain items and special documents, further research or consultation with a document retention professional may be required.