Sometimes we make mistakes, and sometimes those mistakes can seem scary. Fortunately, filing back taxes is nothing to fear. Filing your back taxes is far easier than it first seems, especially if you receive help from a tax professional or tax return software. However, the one thing you shouldn't do is wait. The best way to pay as little as possible while reducing your interest owed and other penalties is to file immediately.
How to file back tax returns in 3 steps
If you’re wondering how to pay back taxes, don’t worry. It’s not as hard as it sounds. Simply follow the steps below:
1. Gather the correct tax documents and other information
First, you need to gather your tax documents from the missing year(s), including all W-2s and 1099 forms that report your income. However, if you can't find your W-2s or 1099 forms, don't worry — you can use Form 4506-T from the IRS to request these documents. The IRS might take up to 45 days to process the request, so make sure to ask for your Form 4506-T as early as possible. Remember: These forms are of vital importance.
If you plan to make deductions or receive credits, especially for those of us with 1099s, you need to gather as many receipts and documents as you can dated during the period. Without them, you have no proof, and the IRS will move forward without consideration.
2. Download previous IRS forms
Once you have the necessary documents, it’s time to download the actual tax forms. However, you need to fill out the form for the appropriate year(s). For example, if you have unfiled taxes from 2017, you need to download the 2017 tax forms from the IRS website and not the current form.
3. Prepare and submit the forms
You need to carefully follow the instructions for each year and fill out your taxes. Make sure you are following the correct instructions for each year — do not use one year’s guidelines on another year. Using the correct guidelines for the year in which you didn’t file taxes prevent you from having to prepare your taxes a second time.
The last step is submitting the forms to the correct IRS address. If you owe money to the IRS, make sure to pay as much of it as possible to reduce the total interest you owe. Unpaid taxes accrue monthly interest that can compound quickly and indefinitely. If you find yourself unable to pay your taxes completely, you might need to enlist the help of a tax relief expert.
Note: If you’re unsure precisely what you owe, it’s okay. Once the IRS receives and processes your filed back taxes, they send a notice detailing exactly what you owe.
Once you have filed your tax returns, it’s good to stay on top of things. To make sure your back taxes owed are being processed, you can contact the IRS and request an update. You can also request account transcripts or inquire to see if there are any outstanding issues on your account.
Is it illegal to not file taxes?
Yes, it’s illegal to not file your taxes. Although you may not necessarily go to jail for missing a year, your information is cataloged and the IRS will eventually seek action against you. The worst part is that the government is well within its rights to add monthly interest and penalties to your bill, increasing the amount owed until you pay in full.
How many years can you file back taxes?
You can file back taxes for as many years as you missed. If you file more than three years after the due date, you might not get a refund. Some tax experts say that paying off the most recent six years’ tax puts you in good standing with the IRS, but it’s best to speak with a tax relief professional or the IRS to confirm.
What if I don’t pay my taxes?
A few things can happen if you don’t pay the taxes you owe. None of these are pleasant, so we urge you to pay back your taxes as soon as possible.
- File a substitute return on your behalf. No, this doesn’t mean you are off the hook for filing your taxes. Because the IRS doesn’t have the information to determine if you are entitled to these or not, you will likely not receive the correct deductions and exemptions. It’s much better to file your tax returns yourself.
- Place a levy on you. Once the IRS has created your substitute return, it sends you a tax bill. If this goes unpaid, the IRS can place a levy on your wages or bank account. Basically, the IRS seizes your paycheck or bank account for as long as it takes to pay your bill.
What if I need help with my back taxes?
If you feel overwhelmed, confused and need back taxes help, that’s okay. There are resources out there dedicated to unfiled tax return help. If your unpaid taxes are minimal, you can use software like TurboTax or professionals from a company like H&R Block who can help guide you through the process.
If you have an overwhelming amount of debt and don’t know your first step, it’s best to seek help from a tax relief company. The companies on our guide are staffed by experts well versed in tax law and have spent years communicating and negotiating with the IRS. They help you file your taxes and escape your current financial situation, putting you on your way to becoming debt-free.
Filing back taxes FAQ
- Do I need to file my back taxes now?
- Filing your back taxes immediately helps avoid paying any further interest or penalties. You can even claim a refund if you are entitled to one. Filing your taxes also protects your social security benefits and help you avoid any issues you may encounter when applying for a loan.
- What if I can’t afford what I owe to the IRS?
- Not everyone can pay back all the taxes they owe. First, try to pay off as much as you can, lowering the interest you owe to the IRS. If you have a large amount of debt owed, over $10,000, it's best to work with a tax relief company to negotiate with the IRS and come up with a plan to pay off the taxes you owe.
- How long do I have to file back taxes?
- It depends. The most important thing to remember is the sooner you file your back taxes, the less likely it is that you find yourself in deeper trouble or owing high interest on your taxes.
- Can I go to jail for not filing a tax return?
- Going to jail for avoided or missing taxes is a possibility. The best way to avoid this or other penalties is by paying back taxes as soon as you can. If you need IRS back tax help, you can work with a tax relief company to help resolve your issue.
- Can I file my 2016 taxes in 2019?
- Yes. You can file any year’s taxes this year or any year after. You can also receive a refund on 2016 taxes, if you are so entitled, if you file by April 15, 2020.
You can still file tax returns, even for several years back. If you expect a refund, make sure to file soon. If you file more than 3 years late, don't expect a refund. To avoid high-interest rates and other penalties, pay back your taxes now. Reach out to a trustworthy tax relief company if you require the help of a professional.