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 Cant Pay The Taxes Due On These Late Returns Set Up An Installment Agreement Or Settle With The Irs
The downside of filing a tax return is you may have to pay taxes you can’t afford. The IRS has payment plans and settlement opportunities for people in your position. Do you think you’re the first person that couldn’t afford to pay their taxes? The IRS has a long history of dealing with taxpayers that can’t pay and has developed solutions. These solutions include Offers in Compromise , Partial Payment Installment Agreement , or Currently Not Collectable status. In short, the IRS will work with you when you can’t afford to pay.
What Happens If You Pay Taxes Late
Throughout the year, you must make estimated tax payments to the IRS, either from automatically withholding them from your paycheck or by manually paying them . When you file your tax return, you’ll discover whether your estimated tax payments were enough to cover what you should’ve paid, or if you paid too much. The former results in a tax bill, and the latter results in a refund.
If you owe taxes, you can make a payment as soon as you’re ready. But if you don’t make a payment, the IRS will send you a notice. And if don’t pay that bill, you’ll receive at least one more notice.
In the meantime, the unpaid taxes will start accruing both penalties and interest. Interest starts accruing on the due date stated on the notice, compounding daily to the unpaid balance. The interest rate has hovered between 3% and 5% in recent years currently, it is 5%. That means if you owe $1,000, you’ll be charged a little more than $4 per month in interest for every month you’re late paying your taxes, in addition to other fees.
You’ll also pay penalties in addition to the interest. Failure-to-pay penalties are 0.5% per month, up to a maximum off 25%, of the unpaid balance.
If you continue avoid paying your tax bill, the unpaid amount could come out of future tax refunds if you’re owed any. Beyond that, the IRS can place a lien on your property and assets. The lien could later become a levy, which means the IRS will seize your property to pay your bill.
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File Electronically In Just Minutes And Save Time
We know that filing your taxes can sometimes be unpleasant. That is why our helpful online tax preparation program works with you to make the filling process as pain-free as possible. Many filers can use our online tax software to electronically file their taxes in less than 15 minutes.
To use the E-file software, a visitor simply needs to create a free account , enter their taxpayer information, income figures, then any deductions they may have, and our software will calculate and prepare the return. Once a user has completed preparing their return they will be provided the option of either e-filing or printing and mailing. It’s as simple as that.
What To Do If You’ve Never Filed Taxes
If you’ve never filed a tax return, it can be confusing and scary to think about the process. The important thing to remember is that the IRS is relatively reasonable. The agency wants to work with people and help them file tax returns. As long as you haven’t committed tax fraud or evasion, you will be able to file your unfiled returns and make arrangements on your tax debt.
If you’re worried that you may have committed fraud, evasion, or another tax crime, you should contact a tax attorney. They can answer your questions and help you identify the best path for dealing with your unfiled returns. Even if you’re not worried about tax crimes, you may still want to have a tax professional help you. A tax pro knows how to navigate the IRS’s rules and processes. They can help you deal with your unfiled returns and get back into good standing with the IRS.
After you contact a tax pro, the first thing you need to do is gather all of the necessary documents. This includes your W-2 forms from each employer you worked for during the year, as well as any 1099 forms if you were self-employed or had other income sources. If you plan to itemize, you should also gather information about your itemizable expenses. That includes medical bills, homeowner’s insurance and interest, state and local taxes, and similar expenses.
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Determine If The Irs Filed A Substitute Return
Just because you didn’t file your return doesn’t mean the IRS won’t file one for you. The IRS may file a Substitution for Return or SFR on your behalf. Don’t think of this as a complementary tax filing service. The substituted return may leave off the exemptions or deductions that rightfully belong to you.
Once an SFR is filed, you will be sent a notice to accept the tax liability as filed in this alternate return. If you don’t respond, the IRS will issue a notice of deficiency. At this point, the tax is considered owed by you and the IRS can begin the collection process. To encourage payment, a levy can be placed on your wages or bank accounts. A federal tax lien may also be placed against your home and real estate.
If an SFR was filed, you don’t have to accept the outcome. You can go back and refile those years and include any available deductions. You may be able to decrease the tax owed and reduce any interest and penalties.
How Can I File And Pay My Back Taxes
Its best to use reliable and easy-to-use software if you’re going to prepare your tax returns yourself. Plan on spending a few hours on each tax return you have to file. There are tax software programs that can help you for free.
Again, make sure youre using software and forms for the appropriate tax year. Regulations vary from year to year, and the software settings can be critical for compliance as well as your liabilities or refund.
You might get a better result by hiring an experienced tax professional because they can help you with more complicated tax compliance and know how to deal with the IRS, if necessary.
Look for someone with significant experience in preparing back taxes if you decide to use the services of a professional. This would be the way to go if you need advice on handling incomplete tax documentation, or an advocate who will negotiate with the IRS on your behalf.
Youll need to print out the back tax returns and mail them in to the IRS to officially file them. You cant do it online.
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You Must File Your Returns On The Tax Forms For The Appropriate Year
If you’re filing a return for a prior tax year, you must use the appropriate form for that tax year. For example, if you’re filing an individual income tax return for 2018, you can’t use Form 1040 for 2020. You must use the 1040 Form for 2018. It’s easy to get these old tax returns. The most convenient way to get the forms is to download them from the IRS Prior Year Forms part of the IRS website. Other ways to get the old forms include:
Picking them up at your local IRS office
Using various tax software programs
Contacting tax professionals, who usually have old forms
Save The Right Paperwork All Year Long
Stay on top of tax-related paperwork throughout the year it will make your life easier during tax season. You might want to keep receipts for things like charitable donations, work-related expenses and medical bills, or other items from step 4. You may also want to keep statements from student loans or investments and any grants or fellowships. Having these handy and organized can help you determine whether to itemize and make the process easier. You should keep your paperwork after you file, too. The IRS recommends keeping records for at least three years.
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Can Taxpayers Do This Themselves
They can try but the problem is that the Voluntary Disclosure Program is very sensitive for qualification. A tax professional has a better idea of what circumstances qualify and which dont. I tell people that its easier to pay a tax expert a small fee to do this for you than to do this incorrectly yourself.
How Long Am I Liable If I Haven’t Filed Tax Returns In Past Years
At least six years, and possibly forever. While the government has only six years from the date the nonfiled return was due to criminally charge you with failing to file a tax return, there is no time limit for collecting taxes and assessing financial penalties for not filing. It is not until you actually do file a return that the audit time limit — three years — and collection time limit — ten years — starts to run.
As a practical matter, however, if you haven’t heard from the IRS in six years, you don’t need to worry too much about taxes owed on a nonfiled return. The IRS usually doesn’t go after nonfilers after six years — unless the IRS begins its investigation before the six years elapsed and you owe a large amount of taxes. After six years, the IRS frequently purges its computer files.
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Get Your Return Filed Or You Could Lose Your Right To Claim A Tax Refund
You have 3 years from the due date of the return to file and claim a refund. In a normal year where April 15th falls on a weekday, this would mean you have until April 15th 3 years from that date to file and get your refund. But, you have until July 15 of 2023 to claim your 2019 tax refund. This is because the 2019 tax deadline – which would have been April 15 – was changed to July 15th because of the coronavirus pandemic.
Similarly, the deadline to claim a refund for 2020 is May 17, 2024, since the 2020 deadline has been changed to May 17, 2021, because of COVID-19. If you file an amended return to get a refund, you have the same statute of limitations for the amended return as for the original return. If you got an extension to file your original return, you have three years from the date you filed the return. This assumes you didn’t file late.
You may not know whether you have a refund due. But, if you had taxes withheld, you probably do have a refund due. Even if nothing was withheld, you may have money due through the earned income tax credit, the Affordable Care Act health insurance premium credit, the child tax care credit , or other refundable tax credits.
How Long Can You Go Without Filing Taxes
The IRS expects every business to file a federal tax return and pay taxes every year. So the real answer to that question is : Zero.
There are no IRS-issued guidelines or allowances that will let you skip filing taxes for a year.
That being said, the IRS also realizes that life doesnât always go smoothly. Medical emergencies, the death of a loved one or business partner, a natural disaster, or other events outside oneâs control can cause severe disruption of oneâs finances, causing business owners to fall behind on all kinds of obligations.
So while youâre not technically allowed to skip filing a tax return, if you do miss the tax filing deadline this year, they wonât come knocking on your door. Instead, youâll begin incurring failure-to-pay and failure-to-file fees until you get your tax forms sorted out. The sooner you get them in, the sooner you stop the fees from piling up.
Note, too, that the IRS does not have a statute of limitations on missing or late tax forms. If you didnât file taxes for the last two, three, ten, twenty, or fifty years, the IRS will still accept your forms as soon as you can get them submitted.
The IRSâs rules are a bit different when it comes to tax refunds, however. If youâre hoping to claim a tax refund, you can only do so for three years. That means you might be forfeiting some money if you donât file within that time period.
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Why Do People Put Off Filing Tax Returns
Its a fast-paced society. Once people skip one year, they get worried and so tend to skip the second year as well. Then if they dont get caught by the CRA they feel theyll never get caught. But with todays sophisticated technology coupled with the federal government aggressively seeking revenues for the nations coffers, the CRA is ramping up its search, and going after tax money and taxpayers everywhere.
What Happens If You Dont File Taxes
If you dont file your taxes with the IRS by the deadline there can be several tax penalties that will cause you to have to pay even more money to the government. So even if you cant pay the full amount at once you should still file your taxes on time.
You can also file an extension which allows you some extra time to figure out your taxes. Below are five reasons why you should file your taxes.
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If You Owe Taxes Youll Pay A Penalty And Interest
Keep in mind paying late comes with repercussions. For every month that you file late, youâll have to pay an additional 5 percent penalty on the total amount you owe. Itâs important to note that a month doesnât mean 30 days to the IRS â filing your return even one day late means you’ll still be hit with the full 5 percent penalty. On top of that, youâll also pay interest, which will only add to your fees. And if you file more than 60 days late, things become a bit more complex and costly â another reason to submit your return as soon as you can.
If you canât pay the full amount you owe when you file, paying what you can and looking into payment plans with the IRS is better than paying nothing.
What Happens If You Dont Owe Taxes Or Get A Tax Refund
Most Americans get a tax refund after filing their federal and state taxes. This occurs when you have paid more in taxes over the course of the year than you owe. Most employers withhold money from each paycheck, which go toward your taxes but those withholdings typically dont account for the rebates and credits that you may be eligible for, resulting in the government needing to pay you back in the form of a tax refund.
If you fall into this category, owing no taxes to the government or being owed a tax refund, then there is no penalty that occurs for not filing your taxes. However, you wont receive your tax refund until you do file your taxes. There will be no penalty for filing late, just get the paperwork in to the IRS so they can process your taxes and issue the refund. Technically, you have three years to file taxes and receive a refund.
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Will The Irs Notice If You File Late
The IRS receives millions of tax returns at the last minute, so you may be wondering if they’ll even notice that yours is a day late.
The real question you should be asking yourself is: Why risk it? Plus, if you mail in your return, the IRS can see the postmarked date on the envelope, so you could very well receive a bill for a small amount if you’re a few days past due.
So if youâre going to be late , make sure to file for an automatic extension. While you’ll still have to fill out and file as much of your 1040 as you can , you’ll have until mid-October to finish the tax-filing process.
This publication is not intended as legal or tax advice. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor.
Time Requirements For Tax Records
The rule for retaining tax returns and documents supporting the return is six years from the end of the tax year to which they apply. For example, a 2015 return and its supporting documents, are safe to destroy at the end of 2021.
There are situations that alter this rule. If you have filed late returns, the six-year rule applies to the date of filing, not the tax year.
Objections and appeals and their expiry dates may go beyond the six-year guideline, says Ben Campbell, a certified financial planner with Investors Group Financial Services in Winnipeg, Manitoba. Documents should be maintained until the last date of appeal expires, or the six-year period ends. Use the latest date as your guideline.
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