How Long Do I Need to Keep Old Checks?

The notion of holding onto paper financial records may seem hopelessly quaint to the current generation. Most banks and many other businesses urge you to accept online electronic statements instead of mailed, paper documents. But similar rules apply whether you retain physical or electronic versions of your records. Tax-related questions from the IRS are the most significant factor affecting how long you should keep checks, pay stubs and related information.

You should keep canceled checks with tax implications for at least ​seven years​, since the IRS says it can audit you during the allowed ​six-year​ window. These include checks that support your income tax returns, such as payments of taxes and deductible items.

Checks and related receipts or documents for home improvements, purchases, sales and renovations should be kept for at least seven years after you sell the property, and perhaps indefinitely. You may need the information to help establish the cost basis of your home, which in turn determines the potentially taxable capital gains on the property’s sale. You may also need documents to prove your claims if you suffer losses or property damage covered by your insurance policies.

You can’t store canceled checks if the bank or other financial institution doesn’t send them to you. But you can order paper copies of checks after your monthly bank account statements arrive. Alternatively, you can print out your statements and retain them for the seven years you may need them for IRS audits and other tax purposes.

Banks that don’t return your canceled checks must keep copies for ​seven years​. If you keep your records electronically, you should ensure you safely back them up in the cloud or on physical media stored offsite.

It’s a wise measure to keep other checks only as long as it takes to verify them against your monthly bank statement. But you may want to retain canceled checks longer to show you paid a debt or a particular bill, depending on the context.

Many online banking apps provide mobile check deposit. You should write “Deposited” on the checks after scanning them and destroying them once you verify their deposit on your bank statement.

You can toss credit card statements and other financial records with no tax significance after about a year. However, you should keep tax records for seven years or longer if related to real estate. Bank of America says you can toss old bills after the payment has gone through, unless you need them for your taxes as a self-employed person.

Checkbook registers are a special case since they form a financial diary of your spending. You should consider keeping them until you’ve reconciled your checks, and maybe up to a year in case issues arise. If you don’t retain paper checks, consider sticking the registers in the seven-year bin. Thankfully, registers are small – you could probably store a lifetime’s worth in a shoebox, but it’s better to stash them in your annual tax folders.

Holding hard copies of essential documents may seem like a small price for financial peace of mind. The seven-year rule helps you respond to audit requests, and documents related to real estate can ensure you don’t overpay the taxes on sale proceeds. Canceled checks may also be necessary for a warranty or insurance claim, establishing the cost of lost or damaged property.

Old checks may help you resolve financial disputes, such as whether you paid a debt. Plus, your financial records can help you with your budgeting by letting you review your income and spending. Good record maintenance is a part of a financially responsible lifestyle.

Weighing against these benefits are the risks associated with the loss or theft of your financial documents. You don’t want thieves accessing the account number on your canceled checks. For many, the ideal answer is in the cloud: Keep your financial information in electronic form and maintain reliable cloud-based backups; everything else can go into the shredder. It’s safe and will save space too.