IRS Tax Transcript | What Is The Purpose Of It? Where Can You Find It?

Why is an IRS Tax Transcript Needed?

IRS Tax Transcript | What Is The Purpose Of It? Where Can You Find It? When you’re faced with a significant purchase, and your lender requires information from a tax return completed three years ago, you may wonder if you need that information. In such cases, having an IRS Tax Transcript can be crucial as it allows you to present your adjusted gross income (AGI) for the previous three years, helping verify your financial situation.

Understanding the IRS Tax Transcript

An IRS Tax Transcript is a summary of your tax return, designed to protect your privacy by revealing only a portion of your personal information. The transcript you request can include various financial and tax-related details, depending on the type. It breaks down your taxable income into its component parts, as seen on your Form W-2. If you find yourself in a similar situation, don’t worry; obtaining this information is straightforward.

How to Obtain an IRS Tax Transcript

You can easily access your IRS Tax Transcript by either obtaining it online or requesting a paper copy. The best part is that it’s free and contains most of the information you need for your Form 1040. Here’s how you can get it:

Online Method

• • Visit the IRS Get Transcript website.
  • Click the “Get Transcript Online” button under the “Request Online” section.
  • Provide your social security number (SSN), birth date, and filing status during the sign-up process.
  • You’ll also need access to your email account and may need to provide account information for certain financial services or products, such as a credit card, mortgage, or home equity loan.

Request by Mail

• • Visit the same Get Transcript website.
  • Under “Request by Mail,” click “Get Transcript via Mail.”
  • You’ll need to provide your birthdate, street address, postal code, and either your SSN or Individual Tax ID Number (ITIN).
  • Ensure your address is up to date with the IRS, as transcripts will be sent to this location.

What Information is Revealed in an IRS Transcript?

The IRS offers five different types of tax transcripts that you can order, depending on your needs:

1. Transcript of Tax Return: Lists most line items from your initial tax return, including AGI, for the current and preceding three tax years.
2. Tax Account Transcript: Provides essential information like return type, marital status, AGI, taxable income, and payment method for the present year and up to 10 past years (online or Form 4506-T) or up to three years (mail or phone).
3. Record of Account Transcript: Combines data from your tax return and tax account transcripts, available for the current year and the prior three.
4. Transcript of Wages and Income: Includes data from your W-2, Form 1099s, Form 1098, and IRA contributions for the most recent 10 years up to the current tax year.
5. Verification of Non-Filing Letter: Provides evidence that you did not submit Form 1040 to the IRS for a given year, available for the most recent tax year and three prior years.

When Might You Need a Transcript?

You may require an IRS Tax Transcript in various situations:

• Mortgage Application: Lenders often request tax transcripts to verify income when you apply for a mortgage.
• FAFSA: When applying for financial aid for college or institution expenses.
• Federal Healthcare Programs: Needed when applying for programs like Medicaid.
• Lost or Incomplete Records: If you’ve misplaced your tax records or they are incomplete.

Obtaining Your Actual Tax Return

If your tax transcript doesn’t suffice, you can still access your tax return through alternative means:

• Third-Party Service: If you filed through a third-party service, log in to your account and go to the “Your tax returns & documents” section.
• IRS Form 4506: Prepare this form and mail it to the IRS, along with a $43 fee, to request a copy of your tax return if you filed through any other method. Keep in mind that processing may take up to 75 days, so ensure a tax transcript won’t meet your needs before proceeding.