Tax Byte
IRS Enhances Its Online Account Features (IR-2025-28)
In a move that significantly improves digital accessibility for taxpayers, the IRS announced the addition of critical information return documents to the Individual Online Account. This represents another step in the agency’s ongoing modernization efforts and creates new opportunities for more streamlined tax preparation processes.
More Documents Available in Online Accounts:
Effective February 27, 2025, taxpayers can access Form W-2 (Wage and Tax Statement) and Form 1095-A (Health Insurance Marketplace Statement) directly through their IRS Individual Online Account. These documents are available for tax years 2023 and 2024 under the “Records and Status” tab.
Tax Practitioner Planning Considerations:
As tax advisors, guide your clients through the process of gathering their filing information for their extended returns by implementing:
- Client Education Opportunities: Clients may not be aware of the IRS Individual Online Account. Informing them about this resource could be exactly what the client needs to make the filing process go smoothly.
- Spouses Must Access Their Own Documents: It’s important to note that each spouse must log into their separate Online Account to retrieve their individual information returns, regardless of filing status. This requirement may create confusion for taxpayers accustomed to receiving paper copies of all household documents.
- State and Local Tax Information Limitations: The IRS Online Account will not display state and local tax information, including such details on Form W-2. Remind clients to retain their original documents for state filing purposes.
- Missing or Incorrect Documents: While this digital access provides convenience, it does not alleviate the responsibility of taxpayers to ensure document accuracy. Not all documents are available early in the filing season. If documents are missing or contain errors, taxpayers should still contact the issuing organization directly.
- Future Expansion: The IRS has indicated plans to add more information return documents to the Individual Online Account in coming months. Staying informed about these additions will help you guide clients through evolving digital resources.
Additional Features Worth Highlighting:
Beyond information returns, the IRS Individual Online Account offers numerous functions that can benefit clients:
- Access to tax return details like Adjusted Gross Income
- Identity protection PIN request and viewing
- Refund status checking
- Account transcripts, including wage and income records
- Electronic signing of Form 2848 Power of Attorney or Form 8821 Tax Information Authorization (with real-time processing)
- Language preferences and alternative media settings
- Electronic notices viewing (over 200 types)
- Payment options: viewing, making, canceling, and setting up plans
- Balance checking
Looking Ahead:
With staffing and budget problems at the IRS, this new feature comes at an opportune time for tax professionals to leverage improved information access.
As advisors, we should encourage clients to create or access their Online Account at IRS.gov Online Account for Individuals while maintaining appropriate safeguards and documentation procedures in our practices.