I recently had to request a copy of my tax return when closing on my home per a lender requirement. I had thought that this would be a hassle given that the requesting parties wanted an official transcript (not a H&R Block or Turbo tax copy).
However it was actually a very simple and free process via your IRS account, that all tax payers can take advantage of.
Not only can you pull your tax transcript for income verification purposes like I had to, but its a great source for getting refund processing information and to see what adjustments the IRS has made to your return for the current tax year.
There are however a few things I learnt which can make the whole process a bit smoother. Firstly though it is important to understand what a tax transcript actually is and what is contains.
What is a tax transcript?
Your tax transcript is essentially your financial and transaction record with the IRS. Or said another way, it is a reflection of the official tax related information the IRS has on you.
A tax return transcript shows most line items from your tax return (Form 1040, 1040A or 1040EZ) as it was originally filed, including any accompanying forms and schedules.
It does not immediately reflect any changes you, your representative or the IRS made (amended) after the return was filed (e.g amendments) nor does it include any attachments (like W-2’s) that were submitted with your tax return.
There are 5 types of free transcripts available va the IRS. This includes:
- Tax Return Transcript – shows most lines from the originally processed 1040 tax return. It doesn’t show changes made after you filed your original return. This transcript is only available for the current tax year and returns processed during the prior three years. A tax return transcript is mainly used for income verification by lending institutions.
- Tax Account Transcript – Provides an overview of ongoing IRS actions on your account, including after filing original return (e.g., filings, credits, penalties). Great for checking your current year refund status, if the IRS WMR/IRS2Go refund tracking tool is not giving you much information.
- Record of Account Transcript – combines the tax return and tax account transcripts above into one complete transcript
- Wage and Income Transcript: listing of information statements (Forms W-2, 1099) that show income reported to the IRS
- Verification of Non-filing Letter – provides proof that the IRS has no record of your return or has not processed if for the tax year in question.
In addition to showing your history and transactions with the IRS, your tax transcript is also a good way to check for fraudulent or unauthorized activity with the IRS.
Because you can request a tax return transcript at any time, it is not a bad idea to get it to download it once a year for your records (e.g before tax season starts)
How do I get my tax transcript (via IRS account)?
All official IRS transcripts available for free via your IRS account (see this YouTube video for access your IRS account/transcript). Go to your tax records tab (per screen shot below), and click the Get Transcript button to access your transcripts.
After following prompts on why you want a transcript and which type, you will be able to view, print, or download all transcript types.
Your IRS account also provides you other useful information estimated tax payments, prior year adjusted gross income, certain notices/letters and the latest economic impact and child tax credit payment amounts.
Individuals can request free copies of their federal tax return information – tax return transcripts and tax account transcripts – online, by phone 1-800-908-9946, or order by mail using IRS Form 4506T (Request for Transcript of Tax Return).
It generally takes 5 to 10 days to get delivered via mail and can only be sent to your mailing address from your latest return.
I highly recommend using the online method or calling the toll-free number because it is faster overall and because you are talking to a real person you can avoid making any obvious mistakes.
Further, once you get your online account setup with the IRS you can access, download and print all IRS transcripts whenever you want.
If you are planning to buying a home and get a mortgage in the near future then I recommend get your IRS account access asap, in order to get the required transcripts ahead of time.
You can also designate or authorize a third party (like your bank or tax preparer) to receive or access your tax transcripts. However be very careful with this and only send it to a credible institution or person that you know.
Which transcript should I get?
The two main ones that most people use are the Tax Return Transcript and the Tax Account Transcript.
In most cases, a tax return transcript will meet the requirements of lending institutions such as those offering mortgages and for applying for student loans. It also meets the requirements for proving your income and residency with other government agencies.
For getting details on your refund status or payment delays, look at your Tax Account Transcript. This transcript shows basic data, including marital status, type of return filed, adjusted gross income and taxable income.
You can use the various tax codes listed in the transcript details section to get insight into your refund status and stimulus checks.
Specifically if they are processing delays (TC 152) with your refund payment you can use your transcript to see if this is due to additional IRS reviews (TC 570) or BFS offsets (TC 203/898) that can both reduce or lower your refund.
What if I need other income verification or tax documentation from the IRS?
If you need a copy of Form W-2 or Form 1099, you should first contact the payer (e.g. your employer) rather than the IRS.
This is because the IRS will charge you a fee for copies of any attachments or forms you submitted with your complete tax return.