What to Do About Unfiled Taxes and How to Get Help With Back Taxes

Ensure you have receipts on hand if you intend to claim certain credits and deductions. 100% Accurate Calculations Guarantee – Business Returns. If you pay an IRS or state penalty https://kelleysbookkeeping.com/ or interest because of a TurboTax calculation error, we’ll pay you the penalty and interest. You are responsible for paying any additional tax liability you may owe.

• If you miss the tax extension deadline, though, that failure-to-file penalty could come back to haunt you.
• File a lien secured to your property, meaning they have a say in any sale of your property or assets and will take the tax payments you owe from the proceeds.
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• You claimed the advanced premium tax credits throughout the year — This credit offsets the cost of health insurance, but it’s based on your adjusted gross income.
• A simple tax return is one that’s filed using IRS Form 1040 only, without having to attach any forms or schedules.

File all tax returns that are due, regardless of whether or not you can pay in full. File your past due return the same way and to the same location where you would file an on-time return. This means that your income was over the reporting threshold in 2016, 2018, and 2020. However, in 2017 and 2019, your income was under the threshold.

Unfiled Taxes Last Year: Missed the IRS Tax Return Filing Deadline

They will then mail you a letter known as an assessment letter that details how much tax you owe. More often than not, you’re better off filing a return, even if you don’t need to. That way, you won’t run afoul of any IRS filing requirements, letting you avoid the penalties, interest and other consequences that come with not filing or paying your taxes on time. Some refundable tax credits specifically require you to file a return, even if you don’t earn enough or meet one of the other criteria used for determining your need to file a return. The summons comes via mail and the IRS collection process begins, meaning the IRS has a reasonable belief that you do owe taxes. You’re legally required to meet with the IRS for you to determine your tax liability.

We will help you fix, submit and correct your unfiled returns. Our team will make sure to get you the absolute best outcome for your situation. To learn more, contact us today for your free consultation.

Credits & Deductions

This happens when the agency has enough information about you from your employer, banks, and other payers that it’s able to create a substitute return for you. Sometimes, the IRS will literally send delinquent taxpayers a bill, in a process known as“Substitute for Returns” . Importantly, the clock doesn’t start until you file. So if the last time you filed a return was 2005, the IRS can audit you as far back as that. It typically tries not to go back further than six years, but it will if it has reasonable cause to. Even if you owe more than $55,000 in taxes, as long as you’re working with the IRS to resolve it, there won’t be further repercussions.

When using direct deposit, the IRS normally issues refunds within 21 days. You can provide that information on the tax form and the IRS will automatically deposit the funds into your account. You may have thought you didn’t have to file taxes because you didn’t make enough money or you were living overseas. However, most people who earn income over a certain amount still have to file their taxes. If it has been years since you filed taxes or paid taxes, you may still be liable for back taxes.

What Happens If I Don’t File Taxes?

In this case, the charge each month is a maximum of 5% (4.5% for failure-to-file and 0.5% for failure-to-pay). The charges accrue at a rate of 5% of the unpaid taxes for each month or part of a month that a tax return is late. The charges max out after five months, at which point the failure-to-file penalty is 25% of the unpaid tax liability. There’s no statute of limitations on a tax audit for a tax year if you don’t file your tax return.

• You may face 2 different penalties—for failure to file and failure to pay—and rack up interest based on the amount of taxes you haven’t paid.
• Ask any tax professional, and they’ll tell you the best way to file your tax return is to e-file it.
• If the IRS wants to pursue tax evasion or related charges, it must do so within six years, generally running from the date the unfiled return was due.
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• When you make a payment plan with the IRS, you agree to pay the amount of taxes you owe in an established, extended timeframe.

There are some key factors to make sure you look out for. If you don’t file your taxes or file for an extension, you will accrue penalties that can be up to 25% of the taxes you owe. Most years, if you have paid 90% of your balance due on Tax Day, the IRS will not penalize you for failing to pay proper estimated taxes. However, if you don’t file within 60 days of the April due date, the minimum penalty is $210 or 100% of your unpaid tax, whichever is less. Therefore, if you owed $210 in taxes and you waited 60 days to file, you wind up paying $420 total.