If I donot want to keep paper copies of my returns and supporting documents is it Ok to scan them and save ?

Answer 1

Yes, it is o.k. to scan and save, this is how I've set up document management at my job. But for documents you've signed, the government can be difficult to deal with so you always want to save originals of bank and governement documents and insurance policies.

Answer 2

That is actually recommended by many advisers. The IRS has there own copies of everything you actually file as well as W-2s, 1099s or other tax forms you and the IRS receive from third parties. Any expense logs, mileage logs, etc that you keep are no more reliable in paper form than as computer files. The only case where paper copies may benefit you over scanned images would be receipts for deductible items. Personally, I doubt the scans would be any easier to forge than paper receipts.