IRS Transcripts - Wage and Income Transcripts
These types of IRS transcripts are a record of all of the wage and income data provided to the IRS by 3rd party providers including your employer, banks, financial institutions, brokerage houses, other government agencies, corporations, casinos, and a few others. All W2s, W2-Gs, 1099s, 1098s, 5498s, K1s, and other records of income on file for your social security number will be listed. Wage and income transcripts are most beneficial when preparing past returns because they are a quick and easy listing of income that you may have earned for that tax year. However, wage and income IRS transcripts should be checked for potential errors and compared with the information that you have in your records. 3rd parties can and frequently do make mistakes. Also, equally important, is to check your wage and income transcript for instances of identity theft. Wage and income transcripts are also an excellent provide insight into what information the IRS has on file for you. Although hopefully you will be able to prevent adverse collection activity before it occurs after reading this book, wage and income transcripts can give some idea of what they may come after (and how quickly they will be able to find it) if collection activity does occur.
It is also important to note that wage and income IRS transcripts are not always complete for the current year, as the IRS is still receiving and processing information from 3rd parties. You should wait approximately fifteen months before viewing a transcript as a complete record of what the IRS has on file for you.
IRS Transcripts - Return Transcripts
Return transcripts are itemized line by line records of your individual income tax return (Form 1040, 1040a, 1040ez) as it was filed and processed by the IRS. When the IRS receives a tax return, it breaks it down into bits of data that it can more easily use. However, since the transcript reflects the return as it was filed, changes made by either the taxpayer or the IRS after the date of filing will not be reflected on the transcript. Still, return transcripts are a good substitute when a taxpayer cannot locate a copy of their tax return. Many banks and other financial institutions requesting tax returns will accept a copy of an IRS return transcript when the original cannot be located.