Taxes: What to Do if You Haven’t Filed

This post was written by Kenon Thompson on June 7, 2022

You may have thought you didn’t need to file taxes because you didn’t make enough money or other extenuating circumstances, or you may have simply forgotten to file your taxes. If it has been a significant amount of time since you filed or paid taxes, you may still be liable for any back taxes. Let’s look at what could happen and how you can minimize the worst of the punishments.

• 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.
• The downside of filing a tax return is you may have to pay taxes you can’t afford.
• Those who are unable to obtain these missing forms can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool.
• If you were due a refund and hadn’t filed, there’s good news and some bad news.
• We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.

LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages https://quickbooks-payroll.org/ for individuals who speak English as a second language. For more information or to find an LITC near you, see the LITC page on the TAS website or Publication 4134, Low Income Taxpayer Clinic List.

If You Receive A 1099 Or W-2, The IRS Will Look For Your Tax Return

Remember that there are two parts to filing a business tax return. With this form, you can file your taxes and let the IRS know how much money you made and how much you owe. If the IRS filed substitute tax returns for you, you could choose how to move forward. This is a pretty easy way to pay your taxes, and if you can’t pay I havent filed taxes in 10 years or more; am I in trouble? the total amount right away, the IRS has some plans to help, like an installment agreement. 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 won’t receive your tax refund until you do file your taxes.

As an independent organization within the IRS, the Taxpayer Advocate Service helps taxpayers resolve problems and recommends changes that will prevent problems. If you inform the IRS that you cannot pay, it is also open to negotiating a smaller payment. Oftentimes, the IRS will lessen your overall tax burden if you are willing to pay in a lump sum.

Fees, Penalties, Interest, and Back Taxes

If you decide to file your tax returns for the missing years, you may pay much less and will have the tax forms you need for future financial decisions. If you can’t afford to pay your taxes, you will want to contact the IRS and inform them of this. The agency is more interested in collecting what it can than penalizing you, and is likely to work with you to set up a payment plan or an installment agreement. Payment plans still carry some interest and penalties, but less than the penalties for those who are not paying. However, failing to make a payment may result in the government requesting the full amount and ending the installment plan.

• The short-term rate changes every three months, so your interest rate may go up or down depending on how long it takes to pay your taxes in full.
• Having old, unfiled tax returns may lead you to believe that the state tax agency or the IRS has forgotten about you and you are off the hook.
• Because the IRS may not have complete information about your situation, it may overstate your tax liability.
• In the unlikely event that the IRS selects your return for audit, the IRS auditor will require you to file all your back tax returns.
• This penalty is typically 5% of the unpaid taxes for each month or part of a month that the return is late, up to a maximum of 25%.

Yet, there are more than 146 million Americans who do file their returns year on year. In other words, about 5% of the total population fails to file their returns. If you haven’t filed your taxes in a few years, the IRS may decide to take money from your wages or bank account to pay off your tax bill.

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This entry was posted on Tuesday, June 7th, 2022 at 10:15 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.