It's important to be diligent while filing your taxes, no matter how easy or complex, and the IRS transcripts available on their website may help.
Submitting a return slowly but completely is usually preferable to submitting a return fast but incorrectly.
Businesses create W-2s and 1099s for employees and IRS copies each year. The IRS may send a notice if you still need to include these.
Tax transcript: what is it?
To preserve your privacy, the IRS transcripts only display select pieces of your personal information. Your whole tax and financial history may be detailed in a transcript, depending on your chosen type. You should expect a detailed breakdown of your taxable income and other items on Form W-2.
What may be seen in an IRS transcript?
The Internal Revenue Service offers five distinct IRS transcripts:
Tax Return Transcript: It includes your adjusted gross income and all other line items from your original return. Upon request, this transcript is available for the current tax year and the two prior years.
Tax Account Transcript: An abridged version of your IRS transcripts, including your filing status, taxable income, and payment method, is available through your tax account. The IRS's official online request form (Form 4506-T) and the phone service (up to 3 years) both allow you to get this transcript for the current year and up to 10 years in the past.
Record of Account Transcript: It includes both the transcript of tax accounts and tax returns. The only years for which this transcript is available are the current and the two previous academic years.
Wages and Income Transcript: Your W-2, 1099, and 1098 forms and your IRA contribution records are the only data sources used to compile your Wage and Income Transcript. This is available for the current tax year and the prior 10 years upon request.
Verification of Non-Filing Letter: You are required to inform the Internal Revenue Service (IRS) of the fact that you did not file a tax return for a specific year by filing a Form 1040 Non-Filer Letter. You can request your current and two previous tax returns.
When would you want to use a transcript?
You may never need IRS tax transcripts if you maintain your records in order and your tax data is easily accessible. You can access the entire 1040 and extract the information you require.
Request a transcript if you misplaced it or didn't complete your tax paperwork. A mortgage lender may request your tax returns to verify income and other details. Home loan lenders have demanded IRS income verification for the past two years.
Tax transcripts may be needed for FAFSA college assistance applications. A tax transcript is another common document that may be required when applying for federal health care programmes.
Pay a professional to handle your tax preparation. You can either do your taxes yourself or hire professionals to help you. Use them with assurance if you're doing your taxes. You can confidently file your taxes by answering a few straightforward questions. Maximise your refund regardless of the filing method. I hope this post was helpful.
