How to File Unfiled Tax Returns
Filing your tax return can be a complicated task. The IRS and most States have not made the tax code simple at all. In fact, over time, most State tax codes and especially the Federal tax code have grown larger and larger whereby the task is almost impossible to complete without the help of a tax preparer or software program. Below are some guidelines to follow in order to file back taxes or unfiled taxes. Remember, if the state you lived in, during a certain year you did not file tax returns does not have an income tax, in most cases you will not need to file a tax return.
- Collect All Necessary Documentation - This means obtain all relevant W2s, 1099s, for the year you are filing for. If you are itemizing deductions, it is good idea to organize receipts and records that prove or support these deductions. If you are unable to find a W-2 or 1099 contact the financial institution and/or employer for the year you are missing. Sometimes the last paycheck you received will do just fine or you can contact the IRS at 1-800-829-1040.
- Locate the Necessary Tax Forms - If you are trying to file a tax return for a year in the past, then you will need to make sure you file forms for that particular year (the IRS will normally request up to the last six years but in some cases may request older tax returns). For example, if you are trying to file a tax return for 2008, then you will need to use the 1040 form (Federal) or state income tax filing form issued for 2008. You can typically find old tax forms online at the IRS.gov (Federal) website or your State's website. If you cannot find the Federal or State tax form online, give them a call or have your friend give them a call. Selecting the right form ensures all deductions, credits, and laws are followed for that year. Even if the IRS has prepared already a "substitute tax return" for you already, send in your past tax return anyway to ensure you obtain the deductions and credits you deserve.
- Use a Tax Preparer or Use A Software Program (optional but recommended) - Filing past year tax returns can be tricky if you do not know what you are doing. In most cases, it is recommended you work with a tax professional preparer or utilize a software program or website the can help you file an old tax return not only because things will be easier but because your chance of an audit will be less likely. With software programs, you can always purchase the software program that was issued for a particular year's filing. For example, if you wanted to file for 2007, then it is best to get TurboTax 2007. Otherwise, if you are using a tax professional they should be able to handle everything for you.
- Mail Your Tax Returns - Whenever you are filing old tax returns may not be able to efile or submit these tax returns to the IRS or State electronically. In fact, in almost all cases they will need to be printed and mailed. In terms of where to send these tax returns, you can send them to the same address you would normally file a tax return to or you can send them to an address listed on any letter you received notifying you of an unfiled tax return (if you received one).
Once you have completed these steps you are well on your way to getting into compliance with the IRS. Even if you are unable to pay taxes owed with an old tax return, it is better to file to lower potential penalties and interest as the consequences of not filing are much greater. Once you have come into compliance with the IRS or State, in most cases, you can work out some type of Installment Agreement or payment plan whereby you will be able to pay tax debt over a series of monthly payments.