Itemized Statement

What Is an Itemized Statement?

An itemized statement is a document issued by a financial institution, such as a bank, credit card company, or brokerage firm, to its customers detailing all account activity for a specific period.

Statements can be issued in paper form and mailed to a customer, but are commonly sent electronically and can be accessed in a customer's online account.

Itemized statements often include deposits, credits, debits, fees, and trading transactions if applicable. The information is often presented in chronological order, although online statements can be sorted according to the customer's preferences.

Key Takeaways

  • An itemized statement is a document issued by a financial institution to its customer detailing all account activity for a specific period.
  • Itemized statements often show deposits, credits, debits, and fees.
  • An itemized statement is often produced monthly and sent via mail or accessed through an online account.
  • Itemized statements provide helpful information when applying for a home mortgage loan, or obtaining information needed when filing tax returns with the Internal Revenue Service (IRS).

Understanding an Itemized Statement

Itemized statements can be issued for many types of bank accounts and financial products, like credit cards. The statements provide detailed information like purchases, merchant names, and ATM withdrawals. Deposits made to accounts in the form of cash or check, or payments to a credit card will also appear on an itemized statement.

Itemized statements were once considered a premium service for preferred customers by many institutions but computerized record-keeping has made them commonplace.

Many e-commerce platforms handle payments and transactions electronically. Sites like PayPal, Venmo, and Stripe also provide detailed itemized statements for online merchants and all of their customers.

How to Obtain an Itemized Statement

Itemized statements are created and provided by a bank or service provider. Before the advent of the Internet, itemized statements would be mailed monthly to a customer for their review and bookkeeping purposes.

Currently, paper statements received through the mail are often only available by request but can be obtained by visiting a branch of the financial institution.

As companies move to an all-paperless format, itemized statements are available electronically through a customer's online account. Transactions viewed online are updated daily or in real-time to provide the customer with a daily statement instead of a monthly summary.

What are the Benefits of an Itemized Statement?

Itemized statements document a customer's record of debits and credits with a financial institution. By providing individuals with details on spending for travel, groceries, and household bills, itemized statements summarize periodic spending and a snapshot for budgeting.

Itemized statements can help detect fraud. If an individual notices unfamiliar transactions on their itemized statement this may provide an alert to identity theft or other fraud and they can issue a stop payment, cancel the debit or credit cards associated with the account, and contact the institution to investigate the activity.

The Internal Revenue Service (IRS) also looks at itemized statements when investigating tax fraud and itemized statements can help determine criminal activity, such as money laundering.

Example of an Itemized Statement

Bert has a bank checking account with XYZ Bank. Every month, he receives an itemized statement detailing all of his transactions.

Bert received an electronic direct deposit for $2000 from his employer on June 6.

On June 7, Check #123 that Bert wrote to his landlord for $700 was cleared in his account.

On June 12, Bert spent $100 on groceries using his debit card with an account number on the card that ends in 5678. He also deposited $50 cash using the bank's ATM.

On June 18, Bert's online payment that he scheduled to pay his car insurance was processed in the amount of $500.

Date Description Credit Debit
6/6 Direct deposit ABC Company $2,000  
6/7  Check #123 $700
6/12  Purchase Grocery *5678   $100
6/12 ATM Cash Deposit $50
6/18  Car Insurance Co. PMT  $500

What If I Detect a Fraudulent Charge on My Credit Card Statement?

It’s important to confirm purchases by reviewing each monthly statement. According to the Fair Credit Billing Act, consumers have up to 60 days to report signs of fraud or other billing errors to credit card services.

Why Do I Need to Provide Bank Statements When Applying for a Mortgage?

When you apply for a mortgage, lenders look at your bank statements to verify that you can afford the down payment, closing costs, and mortgage payments. Some issues that create a concern for lenders include bounced checks or non-sufficient funds fees, large deposits without a documented source, and monthly payments to an individual or non-disclosed credit account.

How Long Should I Keep Bank Statements?

Bank statements should be held for seven years. In case you are audited, the IRS may ask about returns filed in the last three to six years. Any available financial documents may be needed to verify your income, credits, or deductions claimed for a tax return submitted during those years, including bank statements.

Article Sources
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  1. Forbes. "How Long Should I Keep My Credit Card Statements?"

  2. The Mortgage Reports. "3 Things Mortgage Lenders Don't Want to See."

  3. Business Insider. "How Long to Keep Bank Statements."

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