IRS Tax Transcript: Why is it needed? & How can you get it?

If you’re making a significant purchase and the lender is asking for information from a tax return you completed three years ago, do you need that information? If you can’t locate your IRS Tax Transcript, you might need to present your adjusted gross income (AGI) for the previous three years in order to verify your financial situation.

IRS Tax Transcript

An IRS Tax Transcript summarises the information on your tax return, but to preserve your privacy, just a portion of your personal information is shown. The transcript you request may include all of your financial and tax-related information, depending on the kind. Your taxable income will be split down into its component parts as shown on your Form W-2. You shouldn’t freak out if you find yourself in a similar circumstance. 

This information is easily accessible by obtaining your IRS TAX TRANSCRIPT online or asking for a paper copy to be sent to you. You can get this form for free and it contains the majority of the information you must include on your Form 1040. You may always get a free tax transcript by visiting the IRS Get Transcript website if you need one.

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What is Revealed in an IRS Transcript?

The IRS offers five different kinds of tax transcripts that you can order:

  • Transcript of Tax Return: This lists the majority of the line items from your initial tax return, including your AGI. This transcript is available for the most recent tax year as well as the preceding three.
  • Tax Account Transcript: This condensed tax transcript provides essential information such as the type of return submitted, your marital status, your AGI, your taxable income, and the method of payment. With Form 4506-T or online, you can obtain this transcript for the present year and up to 10 past years; if you’re requesting by mail or phone, you can only request up to three years.
  • The Record of Account Transcript, which combines data from your tax return and tax account transcripts, is the most thorough tax transcript you can get. This transcript is only available for the current year and the prior three.
  • Transcript of Wages and Income: This transcript only includes data from your W-2, Form 1099s, Form 1098, and information on IRA contributions. You can ask for it for the most recent 10 years and up to the current tax year.
  • Verification of Non-Filing Letter: This document merely serves as evidence that you failed to submit Form 1040 to the IRS for a given year. One can be requested for the most recent tax year as well as three prior ones.

IRS Tax Transcript

Why Might You Need A Transcript?

You might never require a tax transcript if you maintain thorough records and have all of your tax information organised properly. You can pull the precise information you require from your whole 1040.

You might need to get your transcript to offer an official record of your tax information if you’ve lost your paperwork or it’s not complete.

When you make a mortgage application and the lender requests a copy of your tax history, you may frequently need to provide a tax transcript. Mortgage lenders frequently need at least two years’ worth of tax records to verify your income and prefer to have them directly from the IRS rather than the borrower.

When you use the FAFSA to apply for financial help at a college or institution, you might also need to provide a tax transcript. Another typical example is when you apply for federal healthcare programs like Medicaid, you would need to have your tax transcript on hand.

How Can You Get Your Tax Transcript?

You can obtain your tax transcript from the IRS in one of two ways:

  • You can obtain a tax transcript online. The quickest way to get your transcript is through this method.
  • Visit the Transcript page.
  • Click the “Get Transcript Online” button after swiping down to the “Request Online” area.
  • Your social security number (SSN), birth date, and filing status must be provided when you sign up for the program. In addition to providing account information for a financial service or product like a credit card, mortgage, or home equity loan, you will also need access to your email account.
  • Mail a request for an IRS transcript. Usually, within five to ten calendar days, transcripts are received.
  • Visit the same Get Transcript website that you used to order your online transcript. Under “Request by Mail,” click “Get Transcript via Mail.”
  • You’ll need your birthdate, street address, and postal code, as well as your SSN or Individual Tax ID Number (ITIN).
  • If you have moved, you must update your address with the IRS before ordering the transcript because transcripts will be sent to that location.

What To Do If You Need Your Actual Tax Return?

You still have access to your tax return in other ways if your tax transcript is insufficient for your purposes. You can retrieve your tax return if you filed your taxes using a third-party service by logging into your account and going to the “Your tax returns & documents” section.

You must complete IRS Form 4506 and mail it to the IRS, along with a $43 fee for the IRS to send you a copy of your tax return, if you prepared your taxes in any other way. The processing of these requests may take up to 75 days. So, before beginning this process, make sure a tax transcript won’t do. tap to check more finance queries.