Do you have unfiled tax returns? What should you do?
Life situations have a tendency of sneaking up on some individuals that put them behind on filing their taxes. Once behind one year it can snowball into one year after another. This typically prolongs taxpayers from filing again because of being scared of the consequences. If you read the above caption and immediately went into panic mode, let me first start off by saying you are not alone and we can help you out.
Where should you start?
- Gather all of your Income (W2’s, 1099’s, K1’s, etc) and Expenses (1098’s, Contributions, etc) for the unfiled tax years. Lost your information? Contact us to pull IRS transcripts for you.
- Determine whether or not you are going to file the returns yourself or hire someone to file them.
- File the returns.
The interesting thing that I have noticed on returns that I have caught up for clients is that about half the returns filed typically have refunds. The sad thing is you if you wait more than three years from the due date of the return you will most likely be denied your refund. So it is better to not let the snowball get too many years down the road. Taxpayers who file overdue returns on their own are often treated more reasonable than those who are caught and basically forced by the IRS to file. If you end up owing on your tax returns but are unable to pay, there are a couple of options such as offer-in-compromise or a payment plan. If you would like to learn more about filing prior year returns please contact us.