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. Step One 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. Step Two 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. Step Three 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. Step Four 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. Step Five 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
1. 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. 2. Mail each back tax return in separate envelopes. 3. Mail the back tax returns via certified mail so you receive proof of IRS receipt.
