What Should You Do With Old Checkbooks?

While digital payment methods are increasingly prevalent, many individuals still maintain physical checkbooks, raising questions about their proper handling once no longer actively used. Managing these old financial instruments is important for personal security and record-keeping. This article provides guidance on checkbook information, retention periods, and secure disposal methods.

Understanding the Information in Your Checkbooks

Checkbooks and their stubs contain sensitive financial and personal data. Each check typically displays your full name, address, bank account number, and routing number. Your signature is also present, and the memo line might include details about the transaction’s purpose.

This information presents a substantial risk. Criminals can use bank account and routing numbers to create counterfeit checks or access your account. Your name and address can be exploited for identity theft, potentially leading to forged documents or other fraudulent activities. Even the details in a memo line could be used to gather more information about you.

Determining How Long to Keep Checkbooks

Deciding how long to retain old checkbooks and check stubs involves balancing personal convenience with financial and tax requirements. A general recommendation for tax-related documents is to keep them for at least three years from the date you filed your original tax return or two years from the date you paid the tax, whichever is later. This aligns with the standard statute of limitations for the Internal Revenue Service (IRS) to audit a return.

However, certain situations may necessitate longer retention periods, such as six years if you significantly underreport income, or seven years if you claim a loss from worthless securities or a bad debt deduction. For proof of payment for significant purchases like home improvements or major services, retaining records for the duration of ownership or longer can be beneficial for future tax basis calculations or dispute resolution. It is advisable to keep copies of tax returns indefinitely, as the IRS can question whether a return was filed at all.

Securely Disposing of Old Checkbooks

Once old checkbooks or used stubs are no longer needed for record-keeping, secure disposal is important to prevent identity theft. Simply tossing these items into the trash can expose your sensitive information to fraudsters. The primary goal of disposal is to render all personal and financial data unreadable and unusable.

Shredding, particularly with a cross-cut shredder, is the most effective method, turning documents into small, confetti-like pieces that are nearly impossible to reassemble. If a shredder is unavailable, manual tearing into very small, disparate pieces across multiple trash disposals can offer some protection. Alternatively, burning checks can completely destroy them, provided it is done safely and in compliance with local regulations. For larger quantities of documents, professional document destruction services, often offered by office supply stores or specialized companies, provide a secure and convenient option.