How Do I Get a Business Tax Transcript?

How Do I Get a Business Tax Transcript?

Taxpayers, especially businesses, are always encouraged to save copies of all their tax returns for at least three years. There might be instances in the future where the need to provide information from these returns will arise, such as applying for a working capital loan, buying a new building, or even as simple as switching CPAs or attorneys. But what if you can’t find a copy of your tax return? The good news is, you can get a copy of your tax return transcript from the IRS.

A transcript is a summary of the return information submitted to the IRS. Businesses can get two types of transcripts: a tax return transcript or a tax account transcript. Before requesting a copy of the transcript, the taxpayer should determine which transcript best meets their needs. A tax return transcript shows most line items such as the adjusted gross income from a tax return, along with the forms and schedules, as originally filed. However, it does not show changes made after the original filing. This transcript is available for the current year, as well as the returns processed in the last three years. A tax account transcript shows basic data such as the return type, adjusted gross income, taxable income, and all payments made. It also shows the changes made after the original return was filed.

There are three ways to request a transcript, and the easiest way is to order it online. The IRS offers a tool called “Get Transcript” on its website, IRS.gov. With the Secure Access process, you must prove your identity by answering specific questions related to yourself or your business. Another way to order a transcript is by calling the IRS hotline 1-800-908-9946. However, you’ll probably be put on hold for a long time, an hour or two, if you call them around tax season. If you are not in a rush, you can also order the transcripts by mail. You just have to complete a specific form (4506 series) and mail it to the address in the form’s instructions. Of course, the fastest & easiest way is to use 4506-transcripts.com.

If you need an actual copy of a tax return, you can get one for the current tax year from the IRS for up to the last six years. In this case, you need to order it by mail using Form 4506. Keep in mind that orders placed online and by phone are processed in 5 to 10 business days. Those requested via mail can take up between 30 to 75 business days.

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Is a Company’s EIN Public Information?

Is a Company's EIN Public Information?

The EIN and its purpose

First off, what is an EIN, anyway? An EIN is a number used by the federal government in the United States of America. EIN is an acronym for ‘Employer Identification Number.’ Different agencies within the federal government use it to keep track of businesses’ financial transactions.

EINs are assigned by the Internal Revenue Service (IRS) to a business upon the business’ request. Small businesses with only one employee need an EIN for tax purposes. This includes firms that only hire part-time employees or sub-contractors. The EIN is included with all correspondence to the IRS, including all employee payroll.

Do companies have to give out their EIN whenever requested? When do companies need to use their EIN?

During purchases, many suppliers request the EIN for their own tax fulfillment needs. Many banks refuse to open commercial accounts without an EIN. The same holds for loans. Completing purchases might not be possible without divulging the EIN. This happens because, without the purchasing company’s EIN, the vending company cannot provide proof of the sale when needed.

Some company types must divulge their EIN whenever requested. One type of business is a care provider. This allows interested individuals to check different aspects of the business. However, there is no clearinghouse agency, including the IRS, that provides any type of list or searchable site of EINs.

While public in a sense, EINs need to be protected from misuse. Keeping the EIN secret from anyone who does not need to know it helps prevent fraud.

Can an unauthorized person misuse a company’s EIN?

Unfortunately, unauthorized use of EINs does exist. There are four main ways this can happen to a business.

An employee finds the number and makes personal purchases using it. This often happens because of an associated discount available only to businesses. Keep the EIN private and only accessible to those employees who need the information.

Online use of websites to reach vendors and other B2B entities can open up the door to misuse by those same vendors. Doing business with only well-established, reputable companies and services can help prevent this.

Communicating with vendors on unsecured sites can let hackers snatch your EIN during transmission of purchase orders. Always use sites with URLs that start with ‘https’ and not ‘http’ to avoid this from happening.

Hard copies of your EIN can also end up in the wrong person’s hands. Use a paper shredder for documents containing your EIN and other sensitive information. Porch pirates can even steal the initial letter from the IRS from an unsecured mailbox.

How do I protect my business from the damage caused by the misuse of my company’s EIN?

There are ways to help prevent damage from fraudulent use. A yearly credit check can prevent fraud from going undetected. Keeping your EIN secret unless divulging it becomes absolutely necessary. Do not print it on business cards, invoices, or other documents. Keeping an eye out for the EIN’s hard copy certificate from the IRS makes it less likely someone gets it before you.

While there is no fee to obtain an EIN, and many business activities become limited in its absence, having an EIN frees up sole proprietors from using their social security numbers and preventing personal identity theft.

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Will mortgage lenders accept a tax transcript?

Will mortgage lenders accept a tax transcript?

Mortgage companies want to prevent fraudulent loan applications from being accepted. One way they do this is by verifying an applicant’s tax return. Lenders can go right to the IRS and request transcripts. This means there will not be any opportunity for the transcripts to be altered. Transcripts are only one of the documents lenders need to approve a loan. They also need documentation on all an applicant’s assets and debts. If a person qualifies for a mortgage, the amount of the loan will be based on their income & assets.

Tax returns

During the process of underwriting a mortgage, a lender will view an applicant’s W-2s and pay stubs to confirm their income. A tax return provides a lender with an additional level of protection from any possible misrepresentations of income or fraud. When an applicant’s pay stubs match their tax return, a lender will continue to process their application. Should any irregularities be detected, a lender will want an explanation from the applicant.

Tax Transcripts

This is similar to a person’s tax return. The tax transcript provides most of the line items from a person’s tax return, but a transcript is not a direct printout of a person’s return. It does contain important information desired by a mortgage lender. They can use it to begin the application process. It begins with an applicant submitting IRS form 4506-T. This is a Request for a Transcript of Tax Return from the IRS. When the form is completed and sent, the IRS can send the tax transcript directly to the lender.

Form 4506-T

This form will require the applicant to provide their personal tax information. These are such things as their Taxpayer ID Number, the exact tax forms the applicant filed with the IRS. The online and paper version of form 4506-T permits the applicant to put on a third-party address for where it is to be mailed. When a lender’s address is put here, it will be sent to the lender. The IRS will only release a person’s tax-document information to third parties if they have the tax payer’s consent. This means it is important to sign form 4506-T.

Applicants can order a tax transcript from the IRS online. They are available for the most current tax year as well as the three previous tax years. It could take up to ten days for the IRS to process the request.

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Do Mortgage Lenders Look at Tax Returns?

Do Mortgage Lenders Look at Tax Returns?

Mortgage lenders are important because they make it possible for Americans to have homes. However, every time they offer a home loan, these lenders take a risk that the borrower may not be able to repay the money. Therefore, they need to look at as many documents as possible to determine if a borrower is capable of repayment.

There are many different documents mortgage lenders use to determine financial health. The most important ones are the borrower’s tax returns. With these, lenders can see the actual amount of money a person makes before and after deductions.

They can also see patterns of solvency or insolvency by comparing more than one year of tax returns. Keep in mind that when a lender looks at your tax returns, they are not only looking at one year of earnings. Mortgage lenders generally want at least two years of tax returns. For those offering certain government-backed mortgages such as FHA, VA, and USDA mortgages, then legally, they must have at least 2 years of returns.

When a company requests tax returns from a borrower, they will usually require that they are allowed to request the tax information themselves instead of receiving it from the borrower. This will require the borrower to fill out IRS form 4506-T which bestows the right-to-request tax returns on a 3rd party. This helps prevent any sort of fraud and protects the mortgage company.

Before the housing crash of 2007-2008, lenders were much more flexible when it came to tax returns. Stated-income loans became popular ways to prove financial health. These types of loans do not require tax returns. However, today, most lenders now require them.

As far as stated-income loans are concerned, they are still around, but legally, borrowers must show more proof of income than just a statement.

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What statements are needed for a mortgage?

What statements are needed for a mortgage?

Applying for a mortgage is a large step towards borrowing money for a new purchase. You should, however, be aware of the paperwork required to receive a mortgage. Today, we will go over a few statements that you’ll need. Let’s get right in!

Credit Score

One of the main pieces of information that mortgage lenders will want to see is your credit score. You wouldn’t want to give money to someone who was untrustworthy, right?

The same goes for lenders; they must make sure that your credit score is high, indicating that you will consistently make full payments.

Identification

All lenders will need to see at least one ID but may require multiple forms of identification. This provides them with security, knowing that you are who you say you are.

Typically, lenders will want to see a driver’s license, social security number, passport or another official form of identification.

Tax Returns

Before giving you a mortgage, lenders want to be sure that you are diligently paying taxes. Expect to fill out Form 4506-T, which will allow lenders to see your tax returns.

Once again, this is another precautionary method for lenders.

Bank Statements

Another important piece of information that lenders consider is your bank statements.

Many lenders will request to review statements from your bank. This will allow them to assess your assets, investments, and any other pertinent information.

Evidence of Income

Paying for a mortgage requires a steady stream of income. Before forking over money, lenders will want to see proof that you or your spouse have a steady job.

Some lenders may want to see how much you make annually to determine if you can afford the mortgage payment.

Hopefully, you now know the statements needed to get a mortgage. If you are making a major purchase and need a mortgage, make sure to have these documents prepared.

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