How Long Should You Keep Canceled Checks & Bank Statements?

Paper checks, pay stubs and bills accumulate quickly and clog up desktops and filing cabinets, but people worry about getting rid of them just in case they end up needing these hard copies later for any reason. Do you know how long to keep canceled checks and bank statements and other things like this? This answer is crucial since you want to protect yourself but not have a massive mess in your home or office.

The length of time you should keep credit cards depends on the situation. Check your account statements as soon as you get them in case there are billing errors. Should you need to dispute anything, contact the credit card company right away; you may also need to send them written notice. Hold onto the statement for at least ​90 days​ if you're questioning any charges. If you're tracking expenses or adding up business expenditures, hold onto the statements for ​one year​. The only reasons to hold onto them for longer than that are making personal tax deductions or purchasing extended warranties.

How long to keep utility bills and phone bills, though? Hold onto these bills for ​a year​ unless you're using them for tax deductions, as is the case for home-based businesses. These bills should be filed and kept for ​three years​. This recommendation is the same with paycheck stubs, canceled checks, bank statements and quarterly investment statements. Don't just keep them in a box on your desk, however; keeping good records means that you'll be able to locate these documents when you need them.

​Consider also:​ How Long Should a Paid Preparer Keep Tax Returns?

Business owners need to be extra vigilant with their financial documents because regulators scrutinize these businesses much more closely than individuals are when it comes to tax season. Besides that, lenders might need proof of income and sales history, vendors and insurers might want to see other documents, and if you want to sell the company, buyers will need to do their due diligence and review those past records. Just as importantly, you'll want to protect yourself in case of a dispute or lawsuit.

Business owners should hold onto business formation and loan documents, lease and mortgage paperwork, insurance policies, licenses, permits and asset records for as long as they are in business. It is also wise to save tax returns, employment records and shareholder meeting meetings. However, after ​seven years​, you can shred things like registers, ledgers, credit card and bank statements and sales receipts. To finalize the answer of how long to keep canceled checks for businesses, you should hold onto canceled checks for ​three years​ before shredding.

​Consider also:​ Tax Tips: How Long Should I Keep My Tax Records?

You'll want to hold onto your income tax returns, records of selling stocks and real estate, canceled insurance policies and medical bills. Shred those after ​three years​. You should also save anything else that could support a deduction or income on your tax return for ​three years​. In the case of mobile deposits, individuals only need to keep checks for about five days. The primary reason to keep these sorts of documents for any length of additional time is to protect yourself in case the IRS audits you down the line.

The Federal Trade Commission (FTC) differs on some of that advice, though. Their advice is that it is OK to shred utility bills after paying them and advise holding onto home improvement receipts because some expenses can reduce your capital gains tax. You should keep anything tax-related for ​seven years​; the IRS sometimes audits taxpayers after three have passed. As for pay stubs, shred these after you have checked them against your W-2.

​Consider also:​ How Long Do I Need to Keep Old Checks?