Keeping tax records is vital for any business or individual taxpayer. These records enable you to view your finances and generate financial statements. They can also give you an idea of what expenses are deductible, further reducing your taxable income.
Since tax filing is already complicated as it is, keeping tax records is a good practice that can make tax preparation a whole lot easier. Know how to retrieve your tax records and tips on managing them for a smooth tax filing season.
4 Ways to Request Your Tax Records
1. Online access via the IRS website
If you need a copy of your tax record as soon as possible, the fastest and easiest way is to access it online via the IRS website. All you have to do is download and print your transcript, which is helpful, especially for those who need a physical copy for their records.
You’ll need to prepare a photo identification if you don’t have an IRS username or ID.me account. Once you’ve verified your identity, you can easily go back and fetch your transcript and use other IRS services online.
All transcript types are available in the online portal. However, current year transcript availability depends on your tax filing method and whether you have outstanding balances. Moreover, the online service is only for individual taxpayers, not business entities.
2. File a Form 4506
Those who opt to have an exact copy of their previously filed tax returns or tax information can also file Form 4506. These exact copies are essential in completing current-year tax returns and amending previous ones, applying for government benefits, claiming a refund, verifying income for loan applications, and defending an IRS audit. However, getting a full tax return copy will have a $43 fee per copy.
There are several versions of Form 4506 available on the IRS website. But, the main form you have to accomplish and file is its updated version. However, you can do away with the fee if you don’t need an exact copy using Forms 4506-T and Form 4506-T-EZ. Then you can request free transcripts of the tax returns you’ve previously filed.
You or your spouse can file this, and you’ll need only one signature if you request a jointly filed tax return.
3. Via phone call
Accomplishing a form may take too much of your time, and going through the online portal may be out of your options. If so, you can always relay your requests through the phone. Simply dial 800-908-9946, and you’ll have your tax return or tax account transcripts mailed to your home.
4. Via mail
If you already have an accomplished Form 4506 on hand, you can send it through the mail. Aside from the main requesting form, you can also request other types of tax records like tax transcripts, account records, wage and income, and verification of non-filing using Form 4506-T. You can download and get these forms through the IRS website.
You’ll need to indicate the mailing address you used for your latest return. However, you can also have the IRS send it directly to a third party upon signing and filing it for verification purposes. Note that delivery may take 5 to 10 calendar days or longer, so if you don’t have the luxury of waiting, it’s best to request it using other available alternatives.
Pro Tips for Keeping Your Tax Records
1. Only keep what you need
No one likes sifting through hundreds of papers just to find a single piece of document. Do away with these piles of paper and keep only the necessary documents.
For example, you can keep receipts as a supporting document for your claims or bank statements for amending any tax return corrections.
In any case, the type of documents for safekeeping depends on the claims and purposes you intend to make.
2. Know when to toss out old records
Knowing what to keep and when to toss out records go hand-in-hand. You don’t have to rack up a huge pile of papers in your home office with those old records.
Instead, you can toss out ones that have already reached their statute of limitation. Some records have to be with you for 36 months from the end of the tax filing due date they relate to, while others need to be saved until the end of your tax obligations.
Being aware of the statute of limitations per document type can help you properly manage your tax records and file them come tax season.
3. Use smartphone apps
With the advent of technological advancements, smartphone apps have become an integral part of managing finances. These apps can make your life easier, especially keeping track of all your expenses and the like. As a result, you can navigate your tax filings more efficiently and have total control over your finances.
4. Keep copies in the cloud
Keeping physical copies of your tax records can lead to clutter and make it harder for you to stay organized. By contrast, capturing the necessary information and saving it in cloud storage lets you find your records easily without the unnecessary clutter. This is also a great tax tip for foreign entrepreneurs, as tax records can be accessed at any place and time.
Grab Your Tax Records Today
There are several benefits of keeping tax records, whether you’re an individual taxpayer or a business owner. Apart from making your financial management a breeze, it can also improve how you handle your tax filings. As such, you must know how to request tax records and manage them to avoid any setbacks.