Why You Should Keep Copies of Your Tax Returns and Tax Records

While preparing 2025 tax returns for new clients, I noticed that some clients did not keep copies of their prior-year tax returns.

In some cases, clients only had Form 8879, the form they signed to authorize their CPA or tax preparer to e-file the return. They thought this form was their actual tax return.

But Form 8879 is not a tax return.

Form 8879 is only an authorization form. It allows the CPA or tax preparer to electronically file the tax return on behalf of the taxpayer.

The actual tax return includes many forms and schedules. For example, it may include Form 1040, state tax returns, Schedule C, Schedule E, Form 8863, Form 8938, and other supporting forms.

After your tax return is filed, you should always receive and keep a complete copy of your tax return.

One of the most important reasons to keep your tax return is the possibility of a tax audit.

In general, the IRS may audit a tax return within about three years from the later of the filing date or the due date. The IRS also generally recommends keeping tax records for at least three years.

For example, if your 2025 tax return is filed in 2026, the IRS or state tax agency may still ask questions about that return in 2028 or 2029.

If you do not have a copy of your tax return and supporting documents at that time, it may be difficult to respond.

During a tax audit, simply saying “I gave it to my CPA” or “I remember it was correct” is usually not enough. In general, the taxpayer is responsible for proving the income, deductions, and credits reported on the tax return.

After your tax return is filed, you should keep at least the following records:

• Federal tax return complete copy
• State tax return complete copy
• Income documents such as W-2, 1099, and K-1
• Deduction records such as mortgage interest, property tax, and donation receipts
• For business owners, bank statements, credit card statements, receipts, and mileage logs
• Tax payment confirmations
• IRS or state e-file acceptance confirmations

Keeping tax records is also important for future tax returns.

A tax return may look like a separate document for each year, but many tax items carry over from one year to the next. For example, capital loss carryovers, rental property depreciation, estimated tax carryovers, education credits, and foreign tax credit carryovers may affect future tax returns.

If the prior-year tax return is missing, the next tax return may be harder to prepare correctly.

In general, it is a good idea to keep tax records for at least three years. However, some records should be kept longer.

Business owners, rental property owners, stock investors, taxpayers with foreign accounts, and taxpayers with depreciation may need to keep certain records for a longer period.

Records related to basis are especially important. This includes records for real estate, business equipment, stocks, and cryptocurrency. These records may be needed when the asset is sold, and sometimes even after the sale.

A simple way to stay organized is to create a folder for each tax year.

For example, after filing your 2025 tax return, you can create a “2025 Tax Return” folder and save the tax return PDF and all related documents together.

Tax filing does not end when the return is submitted.

Keeping your tax return and supporting documents properly is the final step in completing your tax filing.