Do you have any unfiled previous tax returns? Do you find it difficult to file your taxes? Don’t be concerned! We can show you many simple ways to file back taxes, as well as what you can do if you are unable to pay any past-due taxes.
What Are Back Taxes?
Back taxes are any past-due taxes that were not filed on time. Many taxpayers are unable to pay their taxes and, as a result, are afraid to file their returns. It is important that you file your overdue taxes since the IRS can impose significant penalties and possibly place a lien on your property if you do not. Tax debt can put you in a slew of financial troubles with the IRS, including having your mortgage or loan denied. Even if you do not have the financial resources to pay your back taxes, the best approach is to file them on time.
How to File Back Taxes?
To submit back taxes, you will first need to gather various documents and tax forms. The first form you will need is Form 1040, which is the main tax form that individuals must fill out. The IRS updates this form every year, so make sure you have the correct form when you file your taxes. However, if you seek professional assistance, you will not have to worry about getting the necessary documents and filling everything out correctly. Contact SDG Accountants in Miami immediately for the best services for your tax and accounting problems.
You must also calculate your income while filing back taxes. The IRS requires your annual income so that they can calculate how much you should receive in returns. W-2 documents and 1099 forms contain your income statement. If you do not have your W-2s or 1099s, you can acquire a free copy from your employer or a copy of your tax transcript from the IRS. You must also file any income that is not recorded on a form, such as a capital gain from bitcoin or interest from a savings account. It is critical to have the proper files on hand when completing your taxes so that you or your tax firm can do so easily.
Why is it Important to File Back Taxes?
People sometimes do not file taxes because they are scared, they will not receive a refund or that it will add to their financial burden. However, they are incorrect; it is critical to file your tax returns to avoid losing a potential refund from the IRS. If you want to receive refunds, you have three years to file your taxes; otherwise, such refunds will be denied. If a taxpayer’s income tax returns have not been filed, the IRS keeps them. The IRS requires an adequate justification to exempt a person from filing certain returns; otherwise, they will remain on file until the taxpayer files the taxes.
If the amount owed exceeds what can be paid, the IRS will grant taxpayers a further 60-120 days if they request it. The request can be made through the Online Payment Agreement application or by calling 800-829-1040; there is no user cost associated with the request. If you are still unable to pay, you can request an installment plan from the IRS or you may be eligible for an offer in compromise.
There are other instances where taxpayers do not submit taxes voluntarily, even though they are able to. In such circumstances, the IRS may file a substitute return, which denies you any deductions or exemptions you may have been entitled to. If you decide to submit your taxes, the IRS will normally refund any deductions or exemptions you were awarded. Otherwise, the IRS will send you a Notice of Deficiency, which is essentially a 90-day deadline to file your past taxes or file a Tax Court petition.
SDG Accountants are tax specialists and advisors who can assist you in determining the best potential solution to your tax concerns. Contact us immediately by scheduling a consultation using the link below for the best rates available.