You Can Prepare A Past Tax Return Online You Just Have To Mail It To The Irs
You may have heard that the IRS doesnt allow taxpayers to e-file past year tax return information. And thats 100% true but that doesnt mean you cant do your past year taxes online!
How? Simple: you can enter your tax information into a site, and use it to file a past year tax return. The development of these sites has actually been fairly interesting. Tax preparation has gone from a professional service to something usually done with a desktop computer program, to something done by a few big websites and now there are hundreds or even thousands of small sites that compete for online tax preparation business.
For years, tax preparation was done primarily one-on-one: an experienced accountant could help someone with their day-to-day filing needs, and could also handle more esoteric issues like real estate taxes, LLCs, and having to file past year tax returns. But as taxes became more complicated, chains of tax preparers grew more common. Like fast-food companies, they didnt always have high quality, but they were very uniform.
The rise of tax filing software changed this significantly. Instead of paying an expensive tax preparation chain, or wondering if an individual tax preparer was up for the job, taxpayers could buy software that would calculate the taxes they owed for them. The problem? Tax software had to be updated every year , and it didnt cover every case. Someone who had to file a past year tax return might have been out of luck.
Filing Back Taxes In Canada
You should file your taxes on time. This is the best way to avoid interest charges, penalties, and additional hassle from the Canada Revenue Agency . However, for many reasons, people sometimes do not file their taxes when they should. Maybe you forgot or maybe you didnt realize that you needed to file. Maybe you did not file on purpose. Sometimes, people believe that its in their best interest to not file their taxes if they dont have the money to pay their tax debt. This isnt true, but its a common belief and it happens.
For whatever reason, if you didnt file your taxes when you should have, and now youre wondering how far back you can file taxes in Canada, the good news is that it is possible to file prior year returns.
What If I Owe More Than I Can Pay
If youre facing a tax bill you cant afford to pay in full right away, you may have payment options.
- Consider paying the IRS with a credit card or personal loan. Using credit to pay your tax debt likely means youll pay interest to the lender. But those costs may be less than the penalties and interest you might face if you fail to pay the IRS on time and in full.
- If you owe $50,000 or less, you can request an online payment agreement from the IRS. Short-term installment agreements give you 120 days or less to pay. A long-term agreement can give you up to 72 months to pay what you owe in monthly payments.
- If you meet certain criteria, you may be able to ask the IRS for an offer in compromise, which could allow you to settle your tax debt for less than what you owe.
- In dire cases when paying anything might prevent you from covering your basic life expenses, the IRS may agree to temporarily delay collection of your past-due tax debt.
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Filing Back Tax Returns
You may be able to fill out past-due tax returns through online software or with an accountant, but youll need to print the forms and mail them to the IRS.
Mail your back tax returns to the IRS in separate envelopes and send them by certified mail so that you have proof that the IRS received each individual tax return. Mailing them in separate envelopes will also help prevent the IRS from making any clerical errors in processing them. It takes about six weeks for the IRS to process accurately completed back tax returns.
Remember, you can file back taxes with the IRS at any time, but if you want to claim a refund for one of those years, you should file within three years. If you want to stay in good standing with the IRS, you should file back taxes within six years.
If You Owe More Than You Can Pay
If you cannot pay what you owe, you can request an additional 60-120 days to pay your account in full through the Online Payment Agreement application or by calling 800-829-1040 no user fee will be charged. If you need more time to pay, you can request an installment agreement or you may qualify for an offer in compromise.
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Next Steps: Plan Ahead For Next Year
Filing accurate tax returns by the filing deadline and paying all the tax you owe on time goes a long way to help you avoid problems with the IRS. Dont wait to clear up your back taxes before getting a jump start on this years tax return.
Start a file for all your tax documents, such as income statements from your employer, interest statements from your bank or receipts for deductible expenses you hope to itemize. Having everything in one place will be helpful when its time to prepare your return.
You can use the IRS Tax Withholding Estimator to help ensure youre having the right amount of tax withheld from your paycheck. If you have too little withheld throughout the year, you could face a tax bill when you file next year. And if you withhold more than necessary, you could get a refund next year.
Relevant sources:IRS Publication 5123 | IRS Tax Withholding Estimator | IRS: Filing Past Due Tax Returns | IRS: Free Tax Preparation for Qualifying Taxpayers | IRS News Releases | IRS Internal Revenue Manual | IRS: Eight Facts on Late Filing and Late Payment Penalties | IRS Fact Sheet: Help Yourself by Filing Past-Due Tax Returns | IRS: Extension of Time to File Your Tax Return | IRS Topic No. 202 Tax Payment Options
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Consequences Of Not Filing Income Tax Returns For Past Years
Failure to file income tax returns for previous years could result in certain consequences such as:
- Interest – Individuals who fail to file their income tax returns within the due date for previous years will be liable to pay interest on their outstanding tax amount when filing returns at a later point in time
- Loss – Any losses that an individual may have incurred during the past years, which may be losses through business or capital loss, will not be allowed to be carried forward to successive years.
- Penalty – Individuals who have failed to file their tax returns for previous years before the cut off date are liable to pay a penalty of Rs 5000, which will be levied by the taxation authorities.
- Prosecution – Failure to file tax returns, concealment or nondisclosure of income for past years could also result in prosecution of the individual by the income tax authorities.
- Error – Sometimes individuals who have failed to file their returns in time for previous years, encounter errors in these returns when they actually do decide to file returns.
- Delay in Refund – Filing of past years income tax returns at a later time could result in a delay in the processing of an individuals tax refund that he or she may be eligible for
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An Offer In Compromise
An offer in compromise is a bit more complex. It involves reaching an agreement with the IRS to pay less than your full balance due. An offer in compromise is typically only approved if youre unable to pay through an installment plan and comes with an application fee. Youll probably need the help of a professional for this option.
You must establish that you cannot pay your balance through an installment agreement or by any other means. All your past due tax returns must be filed before the IRS can grant you this relief, and you must have made some payment toward taxes in the current year, either through withholding from your paychecks or by sending in quarterly estimated payments, even though you havent filed a tax return for the year yet.
Complete And Mail The Forms And Pay Anything You Owe
You may be able to use an online tax preparation service to complete the forms, but you wont be able to e-file your back tax return. Youll need to print out and mail the forms to the address listed in the 1040 instructions for the tax year youre filing. If youre unsure how to proceed, a tax professional can help. You may also be able to get free assistance from the Volunteer Income Tax Assistance or Tax Counseling for the Elderly programs.
And if you have a tax liability back taxes, penalties and interest youll need to pay it or request a payment plan.
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Were Changing How Canadians Feel About Their Taxes
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I did my taxes with Wealthsimple this year and I swear it was the easiest thing Ive ever done in my life.
How Do I Get Help Filing My Taxes Online
If at any point you have a question about your taxes or the software, you can browse answers on our online help forum 24/7, or post a question for our online community of users and experts. While youre filing you may realize that youre looking for more guidance or help with your taxes. In that case you can upgrade to a different TurboTax Online product at any time without losing any of the data youre already entered.
Need more help? TurboTax Live Assist & Review gives you unlimited tax advice from one of our tax experts as you do your taxes, plus a final review before you file to make sure you didnt miss anything. Or if you want to hand off your taxes to one of our experts, TurboTax Live Full Service allows you to simply upload your documents and our experts will complete and file your return for you.
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Can I File My Taxes Online For Free
In Canada, TurboTax makes it simple for anyone with any tax situation to file their taxes for free. These are just a few of the tax situations you could have and use TurboTax Free to file your taxes with the CRA:
- Youre working for an employer and/or are self employed
- Youre a student looking to claim tuition, education, and textbook amounts
- You were unemployed for part or all of 2020, including if you claimed CERB
- Your tax situation was impacted by COVID-19, including if you had to work from home and want to claim related expenses
- You have dependants and want to ensure you claim all related credits and deductions
- Youre retired and receive a pension
- You have medical expenses to claim, including amounts related to COVID-19
- Its your first time filing your taxes in Canada
There are a few situations where youll need to print and mail your return instead of filing online using NETFILE. Dont worry though, you can still enter all your tax info online and well guide you through the process of mailing your return to the CRA.
Request Tax Documents From The Irs
Finding documents from previous years may be challenging for some. Thankfully, the IRS has a form you can fill out to request any tax information they have on file for you for a given year. Form 4506-T allows you to request a transcript of your tax return information, even if you haven’t filed a tax return. You can request information from the last 10 tax years.
The IRS will send the information it has on record, including information found on forms such as W-2s, 1099s, and 1098s. It won’t have information about deductions and credits you may qualify for, though, so you’ll still need to do some work on your own.
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Can I File My Taxes Online For Free If Im A Non
Yes. TurboTax makes it easy to file your Candian tax return as a non-resident. In fact, if youre a non-resident you can use any of the TurboTax Online products, including TurboTax Free. For more info, read about How Residency Status Impacts Your Tax Return
With more than 20 years experience helping Canadians file their taxes confidently and get all the money they deserve, TurboTax products, including TurboTax Free, are available at www.turbotax.ca.
Create And File Prior Year Tax Returns
See the TaxAct Access Prior Year Tax Returns webpage for a list of available Online and Desktop programs for previous years.
Note. TaxAct does not provide archived copies of returns filed through the TaxAct Desktop or TaxAct Professional Editions. If you no longer have access to your saved return file, you can receive a copy of a successfully-filed return from the IRS by calling 800-829-1040. For more information, see the IRS Topic No. 156 Copy or Transcript of Your Tax Return How to Get One webpage.
If you were a prior year TaxAct Online user and did not finish your prior year return, or if you need to start a new return for a previous tax year, you can still prepare and print your return using our TaxAct Online service.
To access an existing return, you need to know the tax year, username, and password that you set up for your account at the time of registration. Go to the Prior Year Returns webpage and select the year you wish to access to start a new return or sign-in to an existing return.
Prior year returns may be electronically filed by those using the TaxAct Professional program or by those using the TaxAct Business Consumer program.
While the IRS now allows year-round electronic filing with the new MeF system, they do shut down for a short period for maintenance each year from later in November to some time around the end of January.
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Havent Filed Personal Or Small Business Corporate Income Tax Or Gst/hst Returns In Several Years Or More
Have you been contacted by or acted upon Canada Revenue Agency including a Request to File or a Notional Assessment ? Or do you want or need to become up to date with tax filings for various personal reasons?
You may feel a sense of urgency or despair to catch up on unfiled previous years taxes. Thats ok, it taxes the mind too.
You may be tempted or receive advice to just file on your own online or visit a tax-preparer not specialized in late-filed returns and CRA encounters. However, there are many factors to consider when filing multiple years tax returns. Its not just about catching up you want to carefully consider your options and likely encounters with CRA. You will want to reduce your tax liability as much as possible as well. An experienced firm specializing in late filing, such as TaxWatch Canada, can help you achieve the best possible outcome for you. We suggest the following steps:
Collection And Enforcement Actions
The return we prepare for you will lead to a tax bill, which, if unpaid, will trigger the collection process. This can include such actions as a levy on your wages or bank account or the filing of a notice of federal tax lien.
If you repeatedly do not file, you could be subject to additional enforcement measures, such as additional penalties and/or criminal prosecution.
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You Can Fall Behind On Your Taxes If You Dont File A Federal Income Tax Return Or Dont Pay Any Tax You Owe By The Due Date Generally April 15 For Most People
Owing back taxes can feel overwhelming. The prospect of facing penalties and interest, or just the sheer work of filing a past-due return, may tempt you to keep putting things off.
But we cant stress enough that being proactive is the way to go when it comes to dealing with the IRS. As soon as you realize you may owe back taxes, or youve missed a filing deadline, its important to file and pay those outstanding taxes as soon as possible to help minimize the consequences of falling behind.
Lets look at some things to know when you have to pay or file back taxes.