Storing bank records online is a breeze. Storing the paper versions, whether cancelled checks or bank statements, is another story as it doesn't take long before they fill up folders and drawers. For tax purposes, you should keep some of those records for a specified time, just in case the Internal Revenue Service (IRS) has questions about tax deductions or requires other tax-related information.
The IRS and Tax Records
The Federal Deposit Insurance Corporation website recommends keeping any cancelled checks or bank statements pertaining to taxes for at least seven years. The IRS can come after you for significant tax under-reporting for that length of time. If you do your banking online, you might ask your bank to send you copies of tax-sensitive checks so you have a hard copy for your files.
If a bank statement or cancelled check doesn't relate to an IRS item, you can shred it after one year. However, you might want to keep checks or statements relating to major life purchases -- such as your house -- indefinitely. The same holds true for checks written for home upgrades, which might come in handy if you sell the property.