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The Case of the Shrinking Tax Return

Be sure to know your tax return history.

 

Do you know your tax return history? Has your tax liability grown or gotten smaller in the past few years? If so, do you know why?

As the economy has entered murky waters, now more than ever is the time to understand how and why your income is taxed the way it is.

For example, did you know that last year, in 2011, not only did the United States hand out fewer tax refunds, but the amount on each refund was smaller?

That's right: The average tax refund was lowered by $100 last year, according to bargaineering.com, a consumer banking and credit information site.

Average U.S. Tax Refund Amount
2007 $2,699
2008 $2,728
2009 $3,036
2010 $3,003
2011 $2,913

Taxpayers received refunds averaging $2,913 in 2011, which was down 3 percent from the average refund of $3,003 in the prior year, according to the latest filing statistics released by the IRS.

The agency delivered a total of $109.3 million refunds during the year, adding up to a total of $318.5 billion. That’s down slightly from 2010 when $109.4 million refunds were given out, totaling $328.4 billion.

You may want to begin looking at your previous year's return to see where you stand.

Even if you are not interested in looking at past returns, it's still a good idea to order and have on hand. Because, let's face it, everyone at some point needs a copy of an old tax return, but cannot find it or doesn't have their own records.

There are three easy and convenient options for getting tax return and account transcripts from the IRS: on the web, by phone or by mail. Here are eight things you need to know about getting federal tax return information from a previously filed return:

1. You can order transcripts online or by phone for the current tax year as well as the past three years. Earlier tax years must be requested with Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript.

2. A tax return transcript shows most line items from your return as it was originally filed, including any accompanying forms and schedules. It does not reflect any changes made after the return was filed.

3. A tax account transcript shows any later adjustments either you or the IRS made after the tax return was filed. This transcript shows basic data, including marital status, type of return filed, adjusted gross income and taxable income.

4. To request either transcript online, go to www.irs.gov and look for the online tool called Order a Transcript. To order by phone, call 800-908-9946 and follow the prompts in the recorded message. When you use these automated self-service options, the selected transcript will be mailed to your current address of record. To have your transcript mailed to a different address, complete and mail Form 4506-T, Request for Transcript of Tax Return. The IRS does not charge a fee for transcripts.

5. To request a 1040, 1040A or 1040EZ tax return transcript through the mail, complete IRS Form 4506T-EZ. Businesses, partnerships and individuals who need transcript information from other forms or need a tax account transcript must use the Form 4506T.

6. If you order online or by phone, you should receive your tax return transcript within five to 10 calendar days from the time the IRS receives your request. Allow 30 calendar days for delivery of a tax account transcript if you order by mail using Form 4506T or Form 4506T-EZ.

7. If you still need an actual copy of a previously processed tax return, it will cost $57 for each tax year you order. Complete Form 4506, Request for Copy of Tax Return, and mail it to the IRS address listed on the form for your area. Copies are generally available for the current year as well as the past six years. Please allow 60 days for copies of your return.

8. Visit www.irs.gov to determine which form will meet your needs. Forms 4506, 4506T and 4506T-EZ can be downloaded at www.irs.gov or by calling the IRS forms and publications order line at 800-TAX-FORM (800-829-3676).

Related Topics: IRS, Tax Returns, Taxes, and tax forms

Jon Lewis

5:49 am on Sunday, February 19, 2012

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3:58 am on Tuesday, February 21, 2012

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4:18 am on Wednesday, February 22, 2012

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