Maybe you didn’t file your taxes because you couldn’t pay. Or life just got in the way. There are many reasons tax return filing doesn’t happen, but it is a big deal to the IRS when returns are missing.
Here are five easy steps to begin moving forward and get back on track.
1. Find out what the IRS wants AND has done
Call the IRS and ask about the status of your account. Confirm which years have unfiled returns and what the IRS requires. Also ask if there are old taxes owed, or if the IRS has filed returns on your behalf.
2. Compare your information to what the IRS has
The best way to ensure that the tax document you have are complete is to request your Wage and Income Transcript for each year of unfiled returns. Use the information in this transcript when preparing your return to avoid inaccurate tax filing. Also, if you have made any Estimated Payments, request your account transcript to verify the amount paid.
3. Understand the limitations & penalties
Sometimes, filing a tax return late means you miss out on a refund. The IRS will only grant refunds on returns filed within 3 years of the due date. If you miss the 3-year mark, the refund is lost. Also be aware that penalties have been adding up since the filing deadline. The two big penalties, Failure-to-Pay and Failure-to-File, can be as much as 50% of the tax amount owed.
4. File your returns
Now that you know which years need to be filed, and you have the Wage & Income record, it is time to file. Click on over to https://www.irs.gov/downloads/irs-prior. This IRS page has a wealth of Forms & Instructions from prior years. Want to see what Form 1040 looked like in 1960? This is the site. Find the Forms and Instructions for each year you need to file and carefully review as tax laws do change frequently.
5. Deal with any tax amounts owed
Now that you have filed your returns it is time to deal with the amount owed. Writing a check for the entire balance is clearly the most direct method, for many folks this isn’t possible. The IRS offers options: Installment Agreement (many different types), Currently Not Collectible status and Offer in Compromise. One, or more, of these options will be right for you based on your specific situation.
Using this methodical process, you can get back on the right track with the IRS and move on with your life.