A tax transcript is the raw version of your financial story that the IRS has on record. Your tax return is your interpretation of what actually happened in the story. When the IRS makes a claim that you owe additional taxes the first place you want to check is your tax transcript.
Let's look at the different transcript types and how you can use them.
Types of Tax Transcripts
There are 5 different transcripts that the IRS makes available to you for free.
Tax Return Transcript - shows most of the line items from the Form 1040 you filed. It also shows numbers from additional forms and schedules. This transcript will not show changes made to your return after you filed it.
This transcript is available for the current year and 3 prior years. This is often the transcript requested by lenders for mortgages and student loans. You can request this transcript by mail. You can also call 1-800-908-9946 to request your tax return transcript.
Only the primary taxpayer can make the request by mail or phone. The secondary spouse can request the transcript online or by using Form 4506-T. You can use this transcript to confirm what you filed on your tax return.
Tax Account Transcript - shows data such as filing status, taxable income, and payments. This transcript shows the most basic data. It does show changes made after you file your original return. This includes amendments or changes made by the IRS.
The tax account transcript is available for the current year and 9 prior years. You can access it immediately through irs.gov on Get Transcript Online. You can also request the current and prior 3 years by mail or calling 1-800-908-9946. You can get years before the last 3 by submitting a 4506-T. You can use this transcript to estimate how long the IRS has to collect back taxes. You can also see when your back taxes are eligible for bankruptcy.
Record of Account Transcript - shows the most information about your tax account. This is the transcript I recommend pulling when you owe the IRS and want to confirm the totals. The record of account transcript combines the tax return and tax account transcripts.
This is available online for the current and prior 3 years. You may also submit a 4506-T to request your record of account transcript. You can use this transcript to see what changes the IRS has proposed to your account.
Wage and Income Transcript - shows the data the IRS has received from 3rd parties for your social security number. This includes information returns like Forms W-2, 1098, 1099, and 5498. The transcript does have a limit of 85 income documents.
You will receive an error message if you have more income documents than the limit. If that is the case you will have to submit a 4506-T to request your wage and income transcript. If that's not the case you can request it online. The current and past 9 years will be available to you.
The transcript is often available in late May. You can use this transcript to file your federal return if you have misplaced your documents.
Verification of Non-filing letter - statement that the IRS has no record of a processed 1040. It does not show if you have a filing requirement or not. You will have to get that information from your wage and income transcript. The letter is available after June 15th for the current tax year.
You can access this for the current year and prior 3 years online or by submitting a 4506-T. You can also request older years by submitting a 4506-T.
If you'd like to know more ways your tax transcripts can help you check out episode 7 of Tax Relief with Timalyn Bowens: Tax Transcripts and What You Should Know.
Timalyn S. Bowens EA is America's Favorite EA and Louisville's Tax Expert that will work hard to find a legal solution that is customized for you! As an Enrolled Agent licensed through the Internal Revenue Service Timalyn is able to fight the IRS for taxpayers in all 50 states.
When you are facing questions regarding your personal or business taxes, working with a professional makes all the difference. At Bowens Tax Solutions, we serve our Louisville-area neighbors by providing the tax services and knowledge needed to succeed. We are here to assist you with your tax issues and preventative care. Visit our website at www.bowenstaxsolutions.com for more information.