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Whether you’re filing a simple or complicated tax return, it’s critical to make sure it’s thorough — and you may have free online tools at your fingertips, in the form of IRS transcripts, to make the process easier.
“Oftentimes, filing a complete and accurate return is much better than filing the return quickly,” said Michael Prinzo, managing principal of tax at CliftonLarsonAllen.
Companies prepare tax forms such as W-2s or 1099s every year, with copies for taxpayers and the IRS. If you skip one of these forms on your return, it may trigger an IRS notice, which can delay the process, Prinzo said.
Generally, you can expect a refund within 21 days by filing an electronic, error-free return with direct deposit, according to the IRS.
How to use IRS transcripts
One way to check which forms you need is by pulling an IRS transcript online, which summarizes some of your key tax information. You can learn more about each transcript type here.
Types of IRS transcripts
- Return transcript: Most line items from your original tax return
- Account transcript: Changes made from you or IRS after original filing, including estimated tax payments or an amended return
- Record of account transcript: Combined details from return and account transcripts
- Wage and income transcript: Income tax forms reported to IRS, such as W-2s and 1099s (may not be complete until July)
The wage and income transcript can be useful if you’re missing forms from freelance work or your investment accounts, explained Jaycob Keuning, a certified financial planner at Straight Path Wealth Management in Jenison, Michigan.
The downside is that the wage and income transcript may not be complete until July, according to the IRS. But it may still be useful for amended or past-due filings.
If you’re not sure which forms you need, reviewing last year’s return transcript may be a good starting point, Keuning said. “From the tax preparer’s standpoint, that is like the holy grail,” because it’s easy to review last year’s filing line-by-line, he said.
How to access IRS transcripts online
1. You must register or log in to your IRS Online Account.
2. After signing in, click “Get Transcript Online” here.
3. Pick a reason from the drop-down menu.
4. Select your IRS transcript by year and download .pdf.
Of course, it’s always best to review the original tax forms for complete details, including statements and footnotes, that may be needed for filing, Prinzo said.
For example, you won’t see the “basis” or starting price of your investments on a wage and income transcript, which you need to calculate profits or losses, he said.
Other uses for IRS transcripts
The return transcript may also be useful outside of tax filing season, Keuning said, especially when working with companies or organizations that need to verify your income.
For example, you may need your tax return when applying for a mortgage, small business loans or social services. “The tax transcript works great as a consolidated version of that — a couple of pages versus 150 pages,” Keuning said.
