This article was fact-checked by our editors and Tolla Tu, tax specialist with Credit Karma.
Have you ever needed to prove your income when applying for a mortgage, car loan, financial aid or some other form of funding?
There are a few ways to prove your income, but lenders and financial aid officers may prefer to see copies of your tax records. Not all tax records are created equal — you’ll generally be choosing between a tax transcript and a copy of a tax return.
You may find that in most cases, a tax transcript will work — and it’s generally easier and cheaper to get than a tax return. Let’s take a look at federal tax transcripts, how they differ from tax returns and how to get your transcript from the IRS.
What is a tax transcript?
A tax transcript is a quick summary of your important tax information from your federal tax return. So instead of getting into the weeds with your financial information for a single tax year the way your tax return does, tax transcripts provide an official overview of the information lenders may want, like your adjusted gross income. The type of tax transcript you get determines the information you’ll see on it.
Tax transcripts used to provide a full range of personally identifiable information, including sensitive data like your Social Security number. But the IRS recently changed the format to help protect filers against identity thieves who could use tax transcripts to file fraudulent tax returns or steal data. Now, much of that information is partially blocked out on tax transcripts so that even if it fell into a crook’s hands, it’d be largely useless.
Since lenders and financial aid officers often use your full Social Security number to link up copies of your tax transcript to your file and confirm that you’re you, the IRS has a new solution. Your lender/financial aid officer can create and provide you with a 10-digit Customer File Number (it can be anything but your Social Security number). You can include your Customer File Number on your tax transcript application so that when it’s printed out, it shows up on the form and your lender/financial aid officer can match it up appropriately with your file.
What types of tax transcripts are available?
Several types of tax transcripts are available from the IRS. When you need information that a certain tax transcript provides, it’s important to get the right one. Here are the differences between them.
Tax return transcript
A tax return transcript is what many people are referring to when they talk about tax transcripts. This document provides the information that lenders and financial aid officers are likely looking for, including your adjusted gross income. It also shows most of the line items in your tax return, along with any other forms or schedules you filed.
But it doesn’t show any changes you’ve made since filing, like if you had to file an amended tax return. Tax return transcripts are only available for the current tax year and the previous three years in which you filed.
Tax account transcript
While similar to a tax return transcript, a tax account transcript will show any changes you made after you filed your return, in addition to your basic tax return information.
Tax account transcripts are also available for a longer period of time — for the current year and up to 10 years after you’ve filed if you request your transcript online. If you get these transcripts over the phone or by mail, though, you’ll only be able to get information for the current year and the previous three years.
Record of account transcript
This transcript is much more comprehensive and includes all the information from both your full tax return transcript and your tax account transcript. It’s only available for the current tax year and previous three years.
Wage and income transcript
If you need specific income information, such as from a W-2, 1099, 1098 or Form 5498, you’ll need to request a wage and income transcript instead. This type of transcript is also available for the previous 10 years, but current-year information may not be complete before July of the current year.
Verification of non-filing letter
If you didn’t file a tax return in a previous year, you can also request a “verification of non-filing” letter to prove it. The letter doesn’t indicate whether you were required to file. It’s only available online for the current tax year and previous three years. For older tax years, you’ll need to file a paper form requesting the letter.
How do I get a tax transcript?
The IRS might not always be the easiest government organization to work with, but at least the agency makes getting your tax transcript easy. And even better: It’s free!
Get your tax transcript online
This is the easiest option for many people. The IRS operates a portal called Get Transcript Online that you can use to quickly request a transcript online. From there, you should be able to view the transcript you need, and then print or download it.
Get your tax transcript by mail
If you need to apply for your transcript by mail, you can fill out Form 4506-T, Request for Transcript of Tax Return. You can also use the online Get Transcript by Mail tool to submit your request for a mailed transcript.
Get your tax transcript over the phone
Finally, the IRS also allows you to use an automated phone line to request a tax transcript. Simply call the agency at 1-800-908-9946.
How do I submit my tax information with the FAFSA?
If you fill out the FAFSA form online, it has a nifty IRS Data Retrieval Tool that transfers your tax return information right into the application. You’ll see this tool on the financial-information section of the form.
When in doubt about what kind of tax document you need — a transcript or copy of your return — check with the party requesting it from you. You may find that many lenders and financial aid officers will accept a tax transcript instead of a copy of your return. In fact, some colleges and universities aren’t even allowing you to use your full tax return anymore.
Getting your tax information to prove your income doesn’t have to be a difficult feat. Generally, you can quickly and easily get a copy of your tax transcript for free.
A tax specialist with Credit Karma, Tolla Tu has international experience in accounting, tax, finance, banking and consulting. She holds a bachelor’s degree in financial management from Beijing University of Chemical Technology, a master’s in corporate finance from Central University of Finance and Economics as well as a Master of Professional Accountancy from Montana State University. You can find her on LinkedIn.