On One Hand: Checks Provide Important Information
Tax preparers and financial counselors advise consumers to hold on to certain canceled checks for a period of 7 to 10 years. Filed tax papers should contain proof of business and schooling expenses, mortgage interest and insurance payments. Other tax-related checks can include energy-efficient home improvement, child-care expenses and other tax deductible expenses. Appliances of all sizes, lawn equipment and some services have warranties that require proof of purchase or payment for service. Checks for these items should be kept until the warranty has expired.
On the Other Hand: Every Check Need Not Be Saved
Many people save all their canceled checks for seven years. However, once you have compared the checks to the payments or purchases and are satisfied that the amounts are correct, you can dispose of the checks. These checks should be ones for non-tax or warranty purposes.
You should feel comfortable discarding most of your canceled checks at the end of each year. You need to keep only tax or warranty-related checks as proof of payment or purchase.
- check book image by Rob Hill from Fotolia.com