How To File Back Taxes

Your Guide to Filing Unfiled Tax Returns

If you have unfiled tax returns, it is extremely important that you file them as soon as possible. The IRS is known to take harsh actions against delinquent tax filers.  One important thing to keep in mind is that it is much worse to not file a tax than to file a tax return and not be able to pay. The IRS has many different payment options individuals can use to pay taxes back that they cannot afford to pay when they are due.  The IRS has a long-standing practice to not suggest criminal examination of those that were delinquent on their tax returns, provided that they willingly file, or make measures to file before they are found by the IRS.  Also, self-employed people that do not file will not receive credits toward Social Security retirement or disability benefits.  It is in your best interest to file back taxes as soon as possible because if you don't file within 3 years from the due date, you will not be entitled to any refund that you had due to you.  Below are some steps to follow when filing back taxes.

Step 1

Contact a Reputable Tax Company to Help - If you are not confident with filling out all the required documents on your own, it is highly suggested to use a tax firm. It is best to use a tax company that is a full service firm that helps with more than just the basic filings of tax returns. Dealing with past due returns are much more complicated than dealing with the regular annual tax filing. Full service tax firms can ensure you get the maximum deductions as well as helping you deal with any penalties and interest that may be associated with the unfiled returns. Most individuals that have multiple years of unfiled returns do not have the means to pay all the taxes owed and a tax firm may be able to resolve these taxes owed for less or setup a manageable payment.

Step 2

Gather Past Due Tax Return Information - In order to file unfiled returns you will need to gather all income related and deduction information for the years that were not filed.  You will particularly need old W-2, forms 1099, expense information, SSN, and a copy of the last tax return you have filed.  If you don't have your old tax information you can contact the company you worked for at the year of the unfiled return or contact the IRS through form 4506-T to request tax documents from the years you need to file.  If the company your worked for or IRS does not have this information you can use form 4852, which is an alternate W-2 which will approximate what your W-2 would have been for those years.

Step 3

Prepare and File Those Returns that were unfiled - You will need to gather the tax returns from the years you did not file.  You cannot use the latest version of tax documents to file for those unfiled years; you will need to request the particular years tax return for filing for those given years that were delinquent.  These documents are readily available on the IRS website or by calling the IRS and requesting them to be sent to you (don't worry, they won't question why).  When you have completed them, be sure to sign them and send to the address given on the instructions. This may be a different address than you typically use for tax returns, but you must send to the address on the instructions.

Step 4

Make Payment to the IRS - If you owe taxes to the IRS you will be required to make payment. Payments can be made by credit card, electronic funds transfer, check, money order, cashier's check, cash, or you can setup a payment plan with the IRS.  If you contact the IRS they will want immediate payment of the taxes owed and pressure you to put on a credit card if you don't have the money immediately available.  Keep in mind that an installment agreement is a great option for paying off taxes owed over a longer period of time.  The interest on payment plans is far less than if you were to put on a credit card. Follow these instructions for setting up an installment agreement with the IRS.

Please remember, if nothing else, that it is never too late to file tax returns!  Although the IRS may not have contacted you regarding your delinquent payments, you should know that it is only a matter of time.  While slow, their collection system is extremely efficient.

If you need help filing back taxes, please contact us and we can help. We are a full service tax company that can help file, settle, or setup a payment plan for your taxes.

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