Things You Should Know About IRS Transcripts

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An IRS Transcripts is a record of your previous year's tax return. This summary or overview of your tax return information is available in five different report types. They include most line items from your tax return, such as your adjusted gross income (AGI), your
filing status, payment, and return type. Your IRS transcript can be obtained
from the government by request online or by mail at no charge.

Why IRS Transcripts is so important

Your IRS Transcripts can be helpful when applying for a student loan or mortgage. This information can be beneficial for lending institutions. An IRS transcript includes most of the line items on the original tax return you filed. People will use their tax Transcripts
for a variety of reasons.

They may want to understand their status with the IRS; Research their income history; verify their return information related to a creditor or a legal matter; prepare accurate and complete tax returns that show all of their income reported to the IRS; Help
resolve many tax notices, discrepancies, and other issues; and research their
accounts while under IRS audit. These Transcripts are available for the current
year, as well as for the previous three years.

Different transcript types

There are five types of IRS Transcripts available from the IRS:

● Tax Return Transcript: This transcript shows most of the line items, including your AGI, from your original tax return filed with any forms and schedules. A tax return transcript does not show changes made after you filed your original return.

● Tax Account Transcript: This transcript provides basic information such as return type, marital status, adjusted gross income, taxable income, and all payment types. The tax account transcript also shows any changes you made after you filed your original
return. Keep in mind that such Transcripts are for the current tax year and up
to 10 prior years of Transcripts available online or using Form 4506-T.

● Record of Account Transcript: This type of transcript combines a tax return transcript and tax account transcript into one complete transcript.

● Wage and Income Transcript: This type of transcript shows data from the IRS received information on forms such as Forms W-2, 1099, 1098, and Form 5498, along with IRA contribution information. Note that data for the current tax year may not be complete until
July.

● Non-Filing Letter Verification: This last transcript gives you proof that the form was filed with the IRS for the requested year. However, this transcript does not show whether you need to file a return for that year.

Note that these Transcripts are not photocopies of your return. If you need a true copy of your return, you must complete and send Form 4506.

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In this article, You got knowledge about IRS TRANSCRIPTS why it's important, and their types.