Raise your hand if you don’t have copies of all your tax returns. Luckily, the IRS has a backup plan for you: tax transcripts. Because there are some instances where you might need access to certain tax info. That’s why we talked to Ana Karina Klein, CPA and founder of AKK Tax and Accounting, about how to get your hands on one.
What is a tax transcript?
It’s a summary of your tax return numbers. “It’s going to provide you with the total amount on your W-2, total dividends, and total business income,” Klein tells us. “But it is not going to tell you the details of those numbers.” If you want the nitty gritty, you’ll need to order a specific type of tax transcript called a wage and income transcript.
Wait. There are different types of tax transcripts?
Yep. Let’s break them down…
Tax return transcript
When people say 'tax transcripts,' they're often referring to this type of transcript. It shows most of the info from your 1040 form. But it won’t show any changes you made after you filed your tax return, which means tax info could be incorrect if you made a mistake. And it’s only available for up to three years after the return was filed.
Tax account transcript
This transcript includes a little more info than the tax return transcript. Like your filing status, payment types, and taxable income totals. Unlike the tax return transcript, a tax account transcript also includes changes made after you filed. And you can request it up to nine years after your return was filed.
Record of account transcript
Want a copy of everything, just to be on the safe side? This transcript is a combination of your tax account transcript and tax return transcript.
Wage and income transcript
All the details. This transcript shows all the data from all of your returns (up to 85 documents). If you can’t access this one, it’s probably because you’ve gone over the max number of pages.
Why would I need a tax transcript?
Klein says there are a few instances when at least one of the tax transcripts we covered above might come in handy.
College: If you’re applying for a student loan or financial aid, you might run into a request for a tax transcript. Usually to verify the information you gave on the application.
Homebuying: It’s also common for mortgage lenders to request tax transcripts to verify your income. Pro tip: Having this info ready will help move the homebuying process along a little quicker.
Immigration: If you’re applying for immigration benefits (like a green card or a visa) you’ll need a tax transcript to prove financial stability and to verify that you’ve consistently paid taxes.
Small business loans: If your side hustle is growing, a business loan could be a good way to keep up with demand. And the lender could request your tax transcript from the IRS to verify your income before handing over the funds you need.
How do I get my tax transcript?
Getting your tax transcript online is the easiest way. As in, a two-step process: “The first step is to create an account with the IRS,” says Klein. Next, go to the tab labeled ‘tax records’ and select ‘get transcripts online’ and download your tax transcript.
If you don't want to go that route, you can also call the IRS at (800) 908-9946 to request one. Or, work with a tax professional in-person to access them.
Anything else I should know when requesting one?
There’s a chance your tax transcript might not be available. And Klein gave us the two reasons this usually happens. One, if the IRS hasn’t processed your most recent return yet. Or, two, you haven’t filed a return for the most recent tax year yet. If you’ve filed a return and it’s unavailable, you can give the IRS a call and ask for them to check on the status of your transcript. If you haven’t filed a tax return yet, it’s time to get it done ASAP.
No need to dig through stacks of paperwork to find old tax returns. The easiest way to get your tax info is to head over to the IRS website. The best part: getting your hands on a tax transcript is free. With no questions asked.
Subscribe to Skimm Money
Your source for the biggest financial headlines and trends, and how they affect your wallet.