Bank statements are one of the most important pieces of financial documentation. It’s essential to know how long to keep bank statements for business and personal use, and what to do with them when they are no longer necessary. In this guide, we’ll explore everything you need to know about keeping and storing bank statements.
What are Bank Statements?
Bank statements are a regular record of your financial transactions. Every month, your bank will provide a statement to you that outlines your account balance, deposits, withdrawals, checks written, and other important financial information.
Keeping your bank statements is important for a number of reasons. Most importantly, they are a record of your financial activity. This information can be used to check for errors, monitor your account balance, and track spending. Additionally, they can be used for tax purposes, to prove income or payment of bills, and to apply for a loan or other credit products.
How Long to Keep Bank Statements for Business
In most cases, you’ll need to keep your bank statements for at least three years (but may be up to seven) as documentation in case of an audit. Bank statements from the previous year should be retained for tax purposes, but they may also be required if you apply for a loan or rent a home.
Federal law requires banks to keep most records on file for at least five years, and many hold members’ account statements for up to seven.
2345 Check with your bank to discover how long your records will be kept. If an audit or other requirement for a statement arises during that time period, you can order them from your bank rather than keeping them on hand—though older statements may incur a modest fee.
How Long to Keep Bank Statements after Death
If you’re the executor of a deceased person’s estate, it’s important to know how long to keep bank statements after death. Generally, it’s recommended to keep bank statements for at least seven years after the date of death. This is to ensure that any potential creditors or other parties that may be owed money by the deceased person are able to collect what is owed to them.
In addition to keeping bank statements, it’s important to keep any other financial documents that the deceased person may have had, such as tax returns, credit card statements, and investment accounts. These documents can help the executor to determine the value of the estate and to make sure that any debts are paid in full.
What to Do with Old Bank Statements
Once you’ve determined how long to keep bank statements for business or personal use, it’s important to know what to do with old bank statements. It’s best to store your bank statements in a safe and secure location, such as a fireproof safe or a filing cabinet. Additionally, you can store them digitally, either on your computer or in a cloud storage system.
It’s also important to note that it’s best to destroy old bank statements. This is to prevent identity theft or other fraudulent activity. It’s recommended to shred or burn any old bank statements that are no longer necessary.
Is It Necessary to Keep Bank Statements?
When it comes to bank statements, it’s important to know if it’s necessary to keep them. Generally, it’s recommended to keep your bank statements for at least one year, but it’s best to consult with an accountant or financial professional to determine the length of time that you should keep your bank statements. Additionally, it’s important to keep any other financial documents, such as tax returns, credit card statements, and investment accounts, for at least seven years.
It’s also important to note that it’s best to destroy old bank statements to prevent identity theft or other fraudulent activity. Additionally, it’s a good idea to store your bank statements in a safe and secure location, such as a fireproof safe or a filing cabinet.
Why Should You Keep Your Bank Statements?
One of the main reasons you need bank statements is to provide verification to the Internal Revenue Service of an item of income, deduction, or credit.
Tax-Related Reasons
The IRS imposes a statute of limitations on income tax returns, limiting the amount of time you have to amend your return, claim a refund, or claim a credit. Furthermore, the statute of limitations limits the IRS’s ability to assess extra tax.
The IRS’s statute of limitations for unpaid taxes is three years from the day you file your initial return. It is three years from the date you filed the return or two years from the day you paid the tax owed, whichever is later, to seek a refund or credit.
In many circumstances, your state’s statute of limitations will overlap with the IRS’s three-year deadline, but there may be some exceptions where you live. Check your state’s legislation to ensure that your statements are accessible during the audit period.
If you need to update your tax return to claim a credit or refund but can’t access your bank statements, you may be unable to show your eligibility. Furthermore, if the IRS assesses additional tax that you know you do not owe, your bank statements may be required to demonstrate why you do not owe it.
Other Reasons to Keep Bank Statements
Keep bank statements for potential lenders, renters, and others with whom you want to establish a financial relationship. They may request to view your bank statements to verify your income while assessing if you can afford the payments for a loan, a rental home, or whatever else.
Bank statements can also be used to establish verification of debit card, check, or bank transfer purchases if someone claims you owe them money. A bank statement may also be useful if you need to use a product warranty or file an insurance claim because it confirms you made the related purchases.
When Should You Keep Bank Statements for a Longer Period of Time?
Due to the amount of time, the IRS can audit you, the IRS may advise you to preserve records for longer than three years in some circumstances.
If you pay employment tax, you must preserve records for four years after the tax is due or paid, whichever comes first.
If money is not disclosed and it accounts for more than 25% of your gross income, the IRS can audit you at any time for the next six years.
You must preserve records for seven years if you report a capital loss owing to bad debts or worthless securities.
If your taxes are easy and you’ve filed them correctly, you probably won’t need to preserve banking statements for more than three years. However, if you have more intricate finances, such as investments, you should make sure you can access them for seven years.
Keeping Bank Statements and Other Documents Organized
Having a method to store and track your statements can make it easier to retrieve information when you need it.
#1. Paper Statements
If you want to retain years of physical statements on file, you’ll need some room. Here are some hard-copy recordkeeping guidelines:
- Get a separate filing cabinet for your financial records.
- Divide the documents into years.
- Sort the papers into categories and types (personal bank statements, business bank statements, investment statements, credit card statements, etc.).
- Sort them chronologically so you can quickly find what you need.
- Keep your most important documents in a fire-resistant safe.
#2. Electronic Statements
Because electronic statements are becoming increasingly widespread, you may want to retain virtual records. However, if you take that route and preserve them on a single device, you risk losing records if the device crashes is lost, or is stolen. Consider backing up your documents on a safe secondary storage device or in the cloud.
Another alternative for digital statements is to call your bank and find out how long they keep statements for so you may view them as needed. Online banking frequently allows you to access, download, and print a few years’ worths of statements. You may typically acquire a statement that isn’t available online but is still within the time period that your bank keeps records. Time frames and prices may differ depending on the institution and account type, so double-check before proceeding.
How Long Should You Keep Monthly Bank Statements?
When it comes to how long you should keep monthly bank statements, it’s best to consult with an accountant or financial professional. Generally, it’s recommended to keep your bank statements for at least one year, but this can vary depending on your business’s accounting system.
It’s also important to note that it’s best to store your bank statements in a safe and secure location. Additionally, it’s a good idea to destroy old bank statements to prevent identity theft or other fraudulent activity.
Do I Need to Keep Bank Statements for 7 Years?
In general, it’s not necessary to keep bank statements for seven years. However, it’s important to keep any other financial documents, such as tax returns, credit card statements, and investment accounts, for at least seven years. This is to ensure that any potential creditors or other parties that may be owed money by the deceased person are able to collect what is owed to them.
Additionally, it’s important to keep your bank statements for at least one year and to store them in a safe and secure location. It’s also a good idea to destroy old bank statements to prevent identity theft or other fraudulent activity.
How Long Should You Keep Old Paper Bank Statements?
It’s best to keep old paper bank statements for at least one year. However, it’s important to consult with an accountant or other financial professional to determine the length of time that you should keep your bank statements. Additionally, it’s important to store your bank statements in a safe and secure location, such as a fireproof safe or a filing cabinet.
It’s also important to note that it’s best to destroy old bank statements to prevent identity theft or other fraudulent activity. Additionally, it’s a good idea to store your bank statements in a safe and secure location, such as a fireproof safe or a filing cabinet.
Can I Get Bank Statements From 10 Years Ago?
In general, it’s not possible to get bank statements from 10 years ago. However, most banks will provide copies of bank statements from the past seven years. It’s important to note that the availability of bank statements from the past seven years may vary depending on the bank.
It’s also important to note that it’s best to store your bank statements in a safe and secure location. Additionally, it’s a good idea to destroy old bank statements to prevent identity theft or other fraudulent activity.
How Far Can Bank Statements Go Back?
When it comes to how far back bank statements can go, it depends on the bank. Generally, most banks will provide copies of bank statements from the past seven years. However, it’s important to note that the availability of bank statements from the past seven years may vary depending on the bank.
Additionally, it’s important to keep your bank statements for at least one year and to store them in a safe and secure location. It’s also a good idea to destroy old bank statements to prevent identity theft or other fraudulent activity.
Do I Need to Destroy Old Bank Statements?
Yes, it’s important to destroy old bank statements to prevent identity theft or other fraudulent activity. It’s also important to store your bank statements in a safe and secure location, such as a fireproof safe or a filing cabinet.
It’s also important to note that it’s best to keep your bank statements for at least one year, but it’s best to consult with an accountant or financial professional to determine the length of time that you should keep your bank statements. Additionally, it’s important to keep any other financial documents, such as tax returns, credit card statements, and investment accounts, for at least seven years.
Conclusion
In conclusion, bank statements are an important piece of financial documentation. It’s essential to know how long to keep bank statements for business and personal use, and what to do with them when they are no longer necessary. Generally, it’s recommended to keep bank statements for at least one year, but it’s best to consult with an accountant or financial professional to determine the length of time that you should keep your bank statements. Additionally, it’s important to keep any other financial documents, such as tax returns, credit card statements, and investment accounts, for at least seven years.
It’s also important to note that it’s best to destroy old bank statements to prevent identity theft or other fraudulent activity. Additionally, it’s a good idea to store your bank statements in a safe and secure location, such as a fireproof safe or a filing cabinet.
By following these tips, you can ensure that you’re keeping your bank statements safe and secure. If you have any questions about how long to keep bank statements or what to do with old bank statements, it’s best to consult with an accountant or financial professional.
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