The two most common reasons for needing a tax transcript are:
- Applying for a mortgage
- Requesting financial aid for college
Many banks and other lenders ask for two years of tax data to verify income for loan processing. You or your child may also need a tax transcript as part of the college financial aid and scholarship process, particularly when filling out the Free Application for Financial Student Aid (FAFSA).
What Are the Different Types of Tax Transcripts?
The IRS offers five types of tax transcripts. These are:
- Tax return transcript. This transcript shows most line items from your 1040, including your AGI. It will not show any changes made after you filed your original return. The tax return transcript is only available for the current and three prior tax years. This is the transcript most often accepted by lending institutions.
- Tax account transcript. As well as your AGI, this transcript includes basic data such as return type, marital status, taxable income, and method of payment to the IRS. Unlike the tax return transcript, the tax account transcript will show changes made after your original filing. It is available for the current and 10 prior years when requested online or by filing Form 4506-T Request for Transcript of Tax Return, but only for the current and three prior years when requested by phone or mail.
- Record of account transcript. This is the most comprehensive tax transcript. It combines the information from the tax return and tax account transcripts into one document. It is available for the current and three prior years when requested online or by filing Form 4506-T.
- Wage and income transcript. This transcript includes income information from your Forms W-2, 1099, and 1098, and data from Form 5498 IRA Contribution Information. It is available for the current and 10 prior tax years.
- Verification of non-filing letter. In this letter, the IRS provides proof that you did not file a Form 1040 for a specific tax year. The letter does not, however, note whether you should have filed a return. You can request this transcript online or by filing Form 4506-T. The transcript is available for the current and three prior years.
How is My Personal Data Protected?
Due to attempts by identity thieves to obtain Social Security numbers (SSNs) and other information through taxpayer transcripts, the IRS started masking portions of identifiable data. While each transcript type includes income information, none include your full SSN, phone number, address, or name.
Here’s what’s visible on a transcript:
- Last four digits of your SSN or employer identification number
- Last four digits of any account or telephone number
- Last four characters of your first name and first four characters of your last name
- First six characters of your street address
What if I Need a Copy of my Tax Return?
Remember, even the most complete tax transcript does not contain all the information from your tax return. If you need a copy of your original return, you can request it via mail using Form 4506 Request for Copy of Tax Return.
If you need a tax transcript and aren’t sure which is best, an experienced tax attorney can assist with the process. At Wiggam Law, our team of experienced tax lawyers can help you evaluate your choices and represent you. Give us a call today at (404) 233-9800 to get started.