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 the IRS site, that all tax payers can take advantage of. 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.
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).
- 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.
While all are available for free via the IRS Get My Transcript service (see this YouTube video for an overview), the two main ones that most people use are the Tax Return Transcript and the Tax Account Transcript.
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 reflect any changes you, your representative or the IRS made 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. 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.
If you do want details on any later adjustments either you or the IRS made after the tax return was filed, you should then request a tax account transcript. This transcript shows basic data, including marital status, type of return filed, adjusted gross income and taxable income. You can also use transcript to get insight into your refund status and stimulus checks.
Individuals can request free copies of their federal tax return information – tax return transcripts and tax account transcripts – online, by phone 800-TAX-FORM (800-829-3676), or order by mail using IRS Form 4506T (Request for Transcript of Tax Return). I 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.
You can also designate a third party (like your bank) to receive the tax transcripts. However be very careful with this and only send it to a credible institution that formally requests tax related information.
IRS Transcript Availability
The table below shows when you can request your transcript following the submission of your tax return
|When your original return shows a …||and you filed electronically, then||and you filed on paper, then|
|refund amount or no balance due,||allow 2-3 weeks after return submission before you request a transcript.||allow 6-8 weeks after you mailed your return before you request a transcript.|
|balance due and you paid in full with your return,||allow 2-3 weeks after return submission before you request a transcript.||we process your return in June and you can request a transcript in mid to late June.
Note: we process all payments upon receipt.
|balance due and you paid in full after submitting the return,||allow 3-4 weeks after full payment before you request a transcript.|
|balance due and you didn’t pay in full,||we process your return in mid-May and you can request a transcript by late May.|
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.
You can request a tax return transcript at any time and it is not a bad idea to get it once a year for your records, particularly if you have misplaced past copies. If you are planning to buying a home and get a mortgage in the near future then I recommend submitting this form early on, in order to get the required transcripts ahead of time.