Hold on to your Tax Returns

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hold on to your tax return
For most of us April is that time of the year when we are required to sit down and report our financial information to the IRS for the previous year. Once the tax returns are filed we set them aside and forget about them. My recent experience tells me that we should add one more step before we’re done with taxes and that is a sensible storage of those documents.

Most of us hardly ever need the past tax returns that’s why once we have a reason to get them, they’re hard to find. I’d like to suggest that not only should the past tax returns be securely stored but also in a place that becomes a go to place for personal information. Whether that’s in digital form or in a physical location at home, decide on one because sooner or later it will become handy.

Why even bother keeping your past tax returns organized?

There are some instances where you will have to show your past earnings. The most common is when applying for a mortgage. This is probably the document that will ultimately determine how much you can borrow. For students, this may come handy when applying for student loans. One other scenario I can think of is to update your resume. If you moved around and changed jobs a lot you may forget names of some of the places where you were employed. Tax return can also help you with preparation of future tax returns.

I can just request a copy, right?

Let’s say you lost or misplaced your tax returns and need a copy. You can contact the IRS and get a copy but it takes time. I had a similar situation few years ago when submitting a mortgage application. The lender requested one more year of tax data and I didn’t have it. I immediately requested a transcript, but I learned that there are two problems with it:

  • I needed the information right away. I happen to shop for a house when housing market was very vivid and sellers were receiving offers in a matter of days. If you’re ever in that type of situation, you don’t want to slow down the process more than necessary.
  • The transcript came in the completely different format that I was accustomed to. It still had all the vital information but rather than elegantly presented by my accountant, it was just stream of numbers and it came without the details included on additional forms.

If you want a complete copy of your tax returns (with all the forms), you have to allow more time for that. It can take 75 days and $50, perhaps more expensive than it cost you to file taxes in the first place.

How to get copies of the past tax returns?

At this moment you cannot get your transcript online. You can request them by mail or over the phone and allow 5-10 days to arrive. To order by mail, see the links below. To order by phone, call 800-908-9946

Helpful links

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