Disclaimer: I am not a tax professional, the information in this post has come from the IRS website. If you need assistance please contact a professional.
Did you “forget” to file your taxes for a few years and now you’re scared to file. Well, you can’t live like this forever so it’s time to see where you stand. The last thing you want to do have the IRS realize you didn’t file and have them file for you. When the IRS filed for you, they don’t apply all of the deductions and credits you actually qualify for (because they don’t know what you qualify for), so that may put you in a worse position than actually filing it yourself.
Well here is what you do:
Verify that you need to file a return. Everyone doesn’t have to file a tax return, especially if your income is below a certain amount. So before you complete a return check out the IRS tool that will tell you if you actually need to file based on your income and filing status. If you don’t have to file and are within 3 years of the of the returns original due date, at least complete the return and see if you are due a refund. If so, file, if not, don’t.
If you are required to file and you owe money, you may have to pay a penalty for failure to file in addition to back interest. If you are unable to pay in full, you may be able to set up a payment plan. The IRS has short (120 days or less) and long-term payment plans available along with the option to settle you what you owe. Just make sure you take action so your wages are not garnished.
If you are required to file and are due a refund, the penalty for failure to file is waived. Also, you are only able to collect if you filed your return within 3 years of the due date. If it is after the 3 years you will not receive a refund.
Depending on what you have going on in your life, you can miss filing your tax return but it’s important to file (if required) as soon as possible. There are several situations you encounter in life where you need a copy of your tax return as proof of income, such as, buying a home, financial aid, renting an apartment etc.
