Why you need your IRS tax transcript?

With identity theft as a constant worry, dealing with online banking and personal information can be worrisome to business owners. The Federal Trade Commission estimates that as many as 9 million Americans get their identities stolen every year. But the IRS is looking to crack down on these scams by making the authentication process more secure.

In June, the Internal Revenue Service re-launched the Get Transcript Online service – an online tax return service – as a way for users to obtain tax transcripts and other tax documents. Even though you may feel like you’re jumping through more hoops, the extra security helps keep your personal information safe.

According to the IRS, the new multi-factor process will include verification, activation or security code emails or texts. While the service was disabled last spring, it has been reactivated with the increased security features. If you used the old system, you’ll need to re-register with the new IRS system.

For things like mortgage applications and student loans, you may already be aware that you need a tax transcript. But it’s important for business owners to have these transcripts on hand. As your company continues to grow, you may be in need of a small business loan to assist in your expansion. 

Keep in mind S-corporations report profits and losses on their owner’s personal tax returns. If you have a C-corporation, you’ll be filing a corporate tax return and paying corporate taxes. Transcripts are free for the current year and the previous three years. Also, transcripts are handy if the IRS ever contacts you about your filings.