If you haven't filed a tax return in a while, you may be wondering what
options you have. It is in your best interest to file those back tax returns
as soon as possible. You might be surprised to learn that filing back
taxes may be the simplest way to get out of your tax problems. You do
however need to protect yourself and have a plan.
- The first step is to gather all of your information for each year
you failed to file a tax return. Research thoroughly any missing
information to be sure the return you file is correct. Do you have
your W-2's, 1099's, and mortgage interest statements? Many taxpayers
with unfiled back tax returns have lost their tax records. You may
contact the IRS to request a wage and income transcript. This
transcript will give you the wage and income information you're
missing. If you were self employed you may need to work with an
accountant to help determine estimates for you.
- The second step is filing your past due IRS returns. The question needs
to be asked whether to file your IRS back taxes yourself or hire a professional.
If you decide to do it yourself be sure to use reliable tax software.
You should also plan on spending two to three hours on each tax year.
On the other hand, hiring a tax professional may not only help you prepare
for filing back taxes but also deal with the IRS for you.
- Protect your refunds. You need to know there are strict time limits
for statute of refunds, audits and collections. You should also know that
if you owe taxes for other years, the refunds may be taken to offset those
other debts.
- Deal with the tax debt that is owed. You should have a plan for how
you will pay off your tax debts. You will also need a plan to protect yourself
from IRS assessments, levys, liens and seizures. This will usually require an
experienced professional to help you resolve these issues. Your plan could be
as simple as setting up a monthly payment plan or writing a check for the full
amount. Regardless of your situation, you need a plan, because ignoring the
IRS can get you in trouble fast.
- Plan ahead. If you found yourself owing in past years, you should do some
tax planning for the current year. You should adjust the withholding in your
paycheck by completing a new W-4. If you make estimated tax payments they
should be adjusted to fulfill your tax liability.
Helpful Hints
- Filing back taxes can not be done electronically. These returns will have to be mailed to the IRS service center. You may also choose to deliver them to a local IRS office.
- Mail each back tax return in separate envelopes.
- Mail the back tax returns via certified mail so you receive proof of IRS receipt.
You haven't filed your taxes in a while. Suddenly, several years have gone by and
you really need to file your back taxes. There is stress and worry, you don't know
what to do. You are not alone, many people need to file back taxes!
Tax Matters Solutions, LLC specializes in filing back taxes for its clients. We
help clients find and organize their information so that we can file an accurate
income tax return. We have worksheets, methods and staff members that help the
client file an accurate return. If you need to file back taxes, you want to ensure
that the return is as accurate as possible. There are many reasons accuracy is
important, penalties and interest accrue from the base tax owed. If your return is
not accurate you may owe way more than you should, had you filed an accurate return.
Recently, Tax Matters Solutions helped a client who owed back taxes. She thought
she owed about $20,000. When we got done preparing the back taxes she owed less
than $2000. Many people worry so much about the balance that is owed they think the
situation is worse than it really is.
We help our clients achieve the best possible results. When you have not filed your
tax returns in a number of years, there is a lot of work that needs done. Let Tax Matters
Solutions help you file your back taxes.
The single worst mistake a taxpayer can make is, not filing a tax return. If you owe
money and you cannot pay, you have options. If you do not file a tax return and you owe
money the IRS will impose a Failure to File penalty. This penalty maxes out at 25% of
the base tax owed. If you do not pay taxes by the due date, the IRS imposes a 25% Failure
to File penalty.
A taxpayer can save many dollars by filing their tax returns on time. If you have many
years of unfiled tax returns, we can help. We have specially trained professionals to help
you file your back taxes. Filing many years of tax returns can be a lot of work and
extremely stressful. If you need to file many years of back taxes you will probably need
professional help.
Many times a professional can help a taxpayer save thousands of dollars of base tax and
penalties. If a professional can help a client save $1000 of base tax owed that will help
save another $500 in penalties. Many times Tax Matters Solutions has helped its client’s
save more money in taxes than fees the client was charged.
Recently, Tax Matters Solutions helped a client with the filing of back taxes. The last
return he filed was for the year 2000. Within a week after meeting this client we had prepared
his 2001 thru 2007 individual income tax returns. Filing back taxes does not have to be a painful and long process.
You owe the government money. You need to pay your back taxes. You have several options
for repaying your back taxes.
As a rule, no governmental agency wants to take your house or throw you in jail just
because you owe back taxes. Generally, the government will let you set up a payment
plan. It is in the government’s best interest to allow you to pay your back taxes over
time. Most governmental agencies will allow you to set up payment plans that will last
several months to several years. In some cases you can set up a payment plan for as
long as 10 years.
If you cannot pay your back taxes with monthly payments you still have options. When
times are tough, many governmental agencies will allow you a grace period to get back on
your feet. The Internal Revenue Service allows people who owe back taxes to be placed
into a Currently Not Collectible status. The not collectible status is designed to allow
people time to get back on their feet. A person that owes back taxes will probably need
professional help to obtain this status.
In cases where you have no hope of repaying the back taxes, many governmental agencies
have programs called Offers in Compromise. These programs are designed to allow the taxpayer
to settle their debt once and for all. If you owe so much in back taxes that you will not
be able to repay, then an offer in compromise may be a good option. You will most likely
need professional help with an offer in compromise. Filing this form and successfully negotiating
a settlement is highly technical and requires specific skills. Most individuals who owe back
taxes will not possess the necessary skills to obtain a favorable resolution.
In most cases the best time to settle your back taxes is when you have nothing. When you are
in the worst financial condition you could ever imagine, that is the time to settle your back
taxes. Let the professionals at Tax Matters Solutions, LLC help you resolve any issues related
to the back taxes you owe.
