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What Are Financial Records?

Financial records are all the documents that keep track of your financial transactions, decisions, and obligations. They can include receipts of purchases, policies, contracts, licenses, certificates, invoices recording products or services sold, and accounting documents like general ledgers, cash flow statements, balance sheets, and income statements.

In a business, financial records are crucial to keeping track of the flow of money. In your personal or home accounting, financial record keeping is also important for filing taxes, tracking your assets, returning products, and much more.

What Financial Records Should I Keep?

There are several ways of deciding this. One way is to think about what you’ll need for your taxes, which are a major expense for any business or household. The IRS recommends you hold onto these records (for your personal accounting, business, or both):

  • Tax Return Support: Any records you need to prepare your tax return and give evidence for the expenses, credits, and income you report on it
  • Listings of Deductible Expenses: Documentation of expenses that you will deduct from your taxes
  • Income Sources: All the ways that you receive income or assets, including which are related to your business and which are personal
  • Property Basis: This is the amount of investment you have in each property asset
  • Income Statement: Your income and expenses for your business
  • Balance Sheet: Your assets, liabilities, and equity

How Long Should I Keep Financial Records?

It’s important to keep records for as long as they are useful and needed—and no longer. Here are some guidelines for how long to keep each type of record:

  • Receipts: Until they can’t be used for a warranty or exchange—or until used for taxes
  • ATM Receipts: 1 month, until used to balance your checkbook
  • Paycheck Stubs: 1 year, until used in annual tax returns
  • Utility Bills: 1 year, or 3 years when used for tax deductions
  • Bank Statements: 1 year, or 3 years when used for tax deductions
  • Canceled Checks: 1 year, or 3 years when used for tax deductions
  • Credit Card Receipts: 1 year, or 3 years when used for tax deductions
  • Quarterly Investment Statements: Until you receive an annual investment statement
  • Tax Returns: 3 years or longer, in case of audits
  • Medical Bills: 3+ years
  • Property Sale Records: 3+ years
  • Stock Sales Records: 3+ years
  • Supporting Documentation on a Tax Return: 3+ years
  • Investment Statements: 3+ years
  • Canceled Insurance Policies: 3+ years
  • Home Improvement Records: 3+ years
  • Documentation You Finished Payments on a Loan: 7 years
  • Documentation You Finished Payments on a Mortgage: Forever
  • Contracts: Until inactive
  • Stock Records or Certificates: Until inactive
  • Property Records: Until inactive
  • Insurance Records: Until inactive
  • Retirement Income Plans: Until inactive
  • Property Tax Bills You Disputed: Until the dispute is over
  • Birth Certificates and Adoption Documents: Forever
  • Wills: Forever
  • Death Certificates: Forever
  • Marriage Licenses: Forever

Financial records can seem intimidating, but we have the solutions. For any questions you have about your financial record keeping, contact ATM Tax Pro to get professional answers. You can also schedule an appointment online for a time that is convenient for you, or check our frequently asked questions to see if your answers are there.