While it’s a good idea to hang onto your tax returns after you file them, there’s another recourse if you don’t have access to actual copies of your return: the tax transcript. A tax transcript is a record of past tax information, including returns you have filed in the past, payments you have made and other activity on your tax account. The team at H&R Block notes that whereas you must pay the IRS to get a copy of your past tax returns, you can get your personal or business IRS transcript for free. This is useful if you need to share financial information with a bank or other lending institution that’s considering you for a loan.
Types of Tax Transcript
The IRS identifies different types of tax transcripts that are available upon request; there are two common options. The first of these is a tax return transcript, which can be used to verify income for lending institutions to whom you may be applying for a mortgage, student loans or other loans. These are based on the tax returns you filed and will not include any changes made to your taxes after the return was filed. They are available for the current tax year and for three years prior.
The second is a tax account transcript, which shows a more complete record of your tax account, including your history of payments and any changes made to your taxes after the return was filed. They are available for the current tax year and for 10 years prior.
In 2018, the IRS altered some features of their tax transcripts in response to an increase in identity theft. Tax transcripts can no longer be faxed to account holders or third parties, and personally identifiable information is partially redacted on the transcript. Moreover, the IRS now allows third parties to assign a 10-digit customer file number that can be used to identify the taxpayer without sharing their full Social Security number.
Request a Business Tax Transcript
As mentioned earlier, the most common use for tax transcripts is to provide income verification to a lending institution that’s considering you for a loan. In 2019, the IRS ceased mailing tax transcripts to third parties, except participants of the Income Verification Express Service (IVES) program. Therefore, the easiest means for an individual to acquire a tax transcript is simply to request it directly from the IRS.
To get a business tax transcript, go to the IRS website, where you can request a transcript by mail or online. Whereas in previous years, individuals couldn’t get an electronic copy of a tax transcript from the IRS without using a third-party service, the online request form now allows taxpayers to access their transcripts quickly and easily.
Transcript Requests and Availability
Compile the necessary information before getting started on creating an online account to request your transcripts. This includes your Social Security number, date of birth, filing status and address on your most recent tax return. You should also have access to an email account and phone number that will be used to verify your account. Once you’ve created a username and password, you’ll have ongoing access to your IRS account and can request additional tax transcripts as needed.
According to the IRS, transcripts are typically available by mid-to-late June if you filed taxes by mail. If you filed online, including through one of the free online services, transcripts generally become available from the IRS within a month. To determine the best free software for taxes, check out the IRS’s Free File page to determine which program is the best fit for your needs.
Taxpayers, especially businesses, are always encouraged to save copies of all their tax returns for at least three years. There might be instances in the future where the need to provide information from these returns will arise, such as applying for a working capital loan, buying a new building, or even as simple as switching CPAs or attorneys. But what if you can’t find a copy of your tax return? The good news is, you can get a copy of your tax return transcript from the IRS.
A transcript is a summary of the return information submitted to the IRS. Businesses can get two types of transcripts: a tax return transcript or a tax account transcript. Before requesting a copy of the transcript, the taxpayer should determine which transcript best meets their needs. A tax return transcript shows most line items such as the adjusted gross income from a tax return, along with the forms and schedules, as originally filed. However, it does not show changes made after the original filing. This transcript is available for the current year, as well as the returns processed in the last three years. A tax account transcript shows basic data such as the return type, adjusted gross income, taxable income, and all payments made. It also shows the changes made after the original return was filed.
There are three ways to request a transcript, and the easiest way is to order it online. The IRS offers a tool called “Get Transcript” on its website, IRS.gov. With the Secure Access process, you must prove your identity by answering specific questions related to yourself or your business. Another way to order a transcript is by calling the IRS hotline 1-800-908-9946. However, you’ll probably be put on hold for a long time, an hour or two, if you call them around tax season. If you are not in a rush, you can also order the transcripts by mail. You just have to complete a specific form (4506 series) and mail it to the address in the form’s instructions. Of course, the fastest & easiest way is to use 4506-transcripts.com.
If you need an actual copy of a tax return, you can get one for the current tax year from the IRS for up to the last six years. In this case, you need to order it by mail using Form 4506. Keep in mind that orders placed online and by phone are processed in 5 to 10 business days. Those requested via mail can take up between 30 to 75 business days.