It is very important to keep a copy of your federal and state tax returns. In the guest post here at TWTP from Trish McIntire (“Best of the Best – Trish McIntire”) Trish said, “The biggest income tax mistake is not keeping a copy of the return and supporting schedules and documents”.
If you prepare your own returns make sure to photocopy every page, Schedule and Form you are sending to “Sam” and your state. If you make the mistake of preparing your own returns using tax preparation software make sure to print out and file away a “hard copy” of the returns.
If you use a tax professional we are required by law to give you a copy of your return.
If you are asked to give a bank, school or other 3rd party a copy of your tax returns give them a copy of your copy. Do not give away your only copy of your tax returns.
While I tell clients that they can toss most back-up documentation for a tax return after four (4) years (the Special Report MY BEST TAX ADVICE gives detailed information on just what records you should keep for how long – see the left margin for how to order the report), I do believe that you should keep the paper copy of your tax returns (Form 1040 or 1040A plus all supporting federal Schedules and Forms) forever. This provides a permanent record of your financial history. You never know when the information on a prior year’s tax return will come in handy for a variety of tax or financial reasons, or just to satisfy personal curiosity.
What can you do if you have lost your copy of your returns? If the return was prepared by a tax professional the first thing to do is contact your preparer and ask for a copy. We tax professionals are required by law to keep on file copies of tax returns we have prepared for at least three (3) years – the “open” years. I keep a copy of every tax return I have ever filed for current clients (I only throw out returns three years after death or three years after a client has gone elsewhere and not returned). Your preparer may charge you a small fee to cover the cost of making the additional copies.
Another source of past year tax returns is the Internal Revenue Service – but this is becoming costly. The fee for an exact copy of a previously-filed and processed tax return and all attachments jumped from $39.00 to $57.00 on November 1st.
To request a copy of a past year’s tax return from the IRS you must submit Form 4506, Request for Copy of Tax Return. Copies are generally available for returns filed in the current and past six years. A “transcript” of a prior year’s return can be obtained by filing Form 4506-T, Request for Transcript of Tax Return. A transcript “shows most line items contained on the return as it was originally filed, including any accompanying forms and schedules. In most cases, a tax return transcript will meet the requirements for lending institutions for mortgage verification purposes.” There is no charge for a transcript.
For more information on getting a copy of past year’s tax information from the IRS check out these links -
How to Get a Copy of Your Tax Return
Frequently Asked Questions on How to Obtain Return Copies
Past/Previous Years Tax Returns
Obviously you should also keep copies of all amended returns and all correspondence with the IRS or a state tax agency.