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How to file back taxes

A step-by-step guide to filing late tax returns

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There are many reasons why people fall behind on their tax returns. A significant life event like a major illness or an unexpected job loss can cause delays, or a complicated inheritance can require additional tax expert help.

Regardless of the reason, it is crucial to take action and get back on track with your tax obligations. Thankfully, filing back taxes does not have to be as overwhelming as it feels.

Key insights 

  • You might still be eligible for a tax refund if your taxes aren’t delayed more than three years.
  • Avoiding filing your taxes for more than three years can result in a tax levy, or seizure of your property to pay the taxes you owe.
  • It is important to file your taxes even if you cannot afford to pay the IRS. The IRS will work with you on a payment plan.

Why you should file back taxes

By filing back taxes, you can regain eligibility for refunds and tax credits that you may have missed out on. In addition, filing back taxes can help you avoid penalties and interest charges.

It is important to file back taxes, even if you are afraid of owing money, to avoid legal consequences and criminal charges. “The best advice is always to file as soon as possible,” said Dana Ronald, CEO of Tax Crisis Institute. “If you cannot do so, you should contact the IRS and make a payment agreement outlining the payments you can make and when they are due.”

How late can you file?

The IRS requires individuals to file within three years to still be eligible for a refund and avoid additional penalties.

Penalties start piling on for late filing right away. Some penalties can be waived or disputed for reasonable causes, such as natural disasters, serious illnesses or system issues that delayed timely filing or payment.

» MORE: What to do if you receive a letter from the IRS

Filing back taxes step by step

If you need to file back taxes, it's important to act quickly to avoid further penalties and interest charges. Here are the steps you should follow:

Gather all of your tax paperwork

You will need any documents that show how much money you made and how much tax you paid in the year(s) you need to file for, including things like W-2s and 1099s.

You should be able to access copies from your employer even if it has been a few years. If you still can’t find these documents, don't worry — you can use Form 4506-T from the IRS to request these documents.

Have proof for credits and deductions

If you plan to make deductions or receive credits, you need to gather as many receipts and documents dated during the period as you can. Without them, you have no proof, and the IRS will move forward without consideration.

Fill out the right year’s form

You will need to download the right tax form from the IRS for the year(s) you missed. Tax brackets and limits change every year, so it is important not to file back taxes with a current year’s form.

You will also need to fill out the form according to your tax situation during the year you missed.

Pay any money you owe

If you owe any taxes for the years you're filing for, you'll need to pay them. If you can't afford to pay the taxes all at once, you can set up a payment plan with the IRS. If you’re unsure precisely what you owe, it’s OK. Once the IRS receives and processes your filed back taxes, it sends a notice detailing exactly what you owe.

Once you submit your back taxes, print out a copy to have on hand. It is also a good idea to monitor your submission to ensure the IRS gets your taxes and that no other follow-up actions are required.

What if I need help filing back taxes?

There are resources available to provide assistance with unfiled tax returns. If you owe a small amount of unpaid taxes, you can turn to tax software like TurboTax or seek the guidance of professionals from companies like H&R Block to help you navigate the process.

However, if you're facing a significant amount of debt and don't know where to start, it's recommended to seek help from a tax relief company. These companies are staffed by experts who are knowledgeable about tax law and have extensive experience communicating and negotiating with the IRS. They can assist you in filing your taxes and help you get on the path to tax compliance.

One Texas reviewer used a tax relief attorney when they had $11,000 of unpaid back taxes. After using them, they said: “ I don't feel the pressure of back taxes, back penalties and all of that adding up. I paid a third of the cost and I had the reassurance that [IRS] weren't going to try to take my house or any of my possessions.”

Can I get in trouble for not filing taxes?

Failing to file your taxes is illegal, though you are more likely to face a lot of fees rather than jail time. If you don’t file your taxes by the yearly due date or a granted extension deadline, you will be charged penalties immediately. The Failure to File Penalty is 5% of the unpaid taxes for each month or part of a month that a tax return is late. This penalty won't exceed 25% of your unpaid taxes. Additionally, interest on penalties will be charged.

If you still have not paid your taxes and fees within three years, you can have a tax levy placed on your paycheck or bank account, which is when the IRS legally seizes your property in order to satisfy the tax debt. If you do not have enough money to repay the IRS, it is still better to seek a payment plan through the IRS than to avoid the issue.

» MORE: How to set up a payment plan with the IRS

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    What if I can’t afford to pay the IRS?

    The worst thing you can do is ignore the problem or not file your tax return. It is important to file your taxes and work out a payment plan with the IRS. Additionally, you can take out a loan or work with a tax relief company to make your tax bill more manageable.

    Can I go to jail for not filing taxes?

    While jail time is a possibility, the IRS is usually looking to punish taxpayers who are trying to evade their tax responsibility by keeping secret income or investments. It is more likely that you will face a lot of financial penalties and a tax audit for not filing your taxes.

    Can I file back taxes online?

    You can file back taxes online using the IRS Free File program or other online tax preparation services. However, whether you can file your specific back tax returns online depends on the tax year and whether the IRS has made the necessary forms and instructions available online.

    Bottom line

    Filing back taxes can be a difficult and challenging process, but it is important to remember that in most cases, the IRS will work with you to settle any unpaid taxes. If you have any questions or concerns about filing back taxes, it is best to speak to an accountant or tax professional, who can provide guidance and help you understand your unique situation.

    ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. To learn more about the content on our site, visit our FAQ page. Specific sources for this article include:
    1. IRS, "Don’t Lose Your Refund by Not Filing." Accessed Feb. 24, 2023.
    2. IRS, “Failure to File Penalty.” Accessed Feb. 24, 2023.
    3. IRS, “Penalty Relief for Reasonable Cause.” Accessed Feb. 24, 2023.
    4. IRS, “Form 4506-T.” Accessed Feb. 24, 2023.
    5. H&R Block, “Who Goes to Prison for Tax Evasion?” Accessed Feb. 28, 2023.
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