How to File Back Taxes

People don’t file their taxes for many reasons. The inconvenient reality, however, is that the IRS still requires the filing of late and back taxes even though some of the reasons for doing otherwise are acceptable. To classify, late taxes cover those returns that should have been filed for a single year while back taxes are the tax dues dating as early as the mid 1980’s. The best part of doing this is avoiding possible problems that you may have with the IRS.

There might be occasions when all tax records are not available. This occurs in cases of fire, flood and other natural calamities when all of a person’s belongings, including tax records, are destroyed. Good thing that tax attorneys or accountants are around to help clients reconstruct or retrace their tax records dating as far back as 15 to 20 years ago. These alternatives make the arena of back taxes clearer.

Some people would have liked to dutifully pay for their taxes had it not been for certain situations, such as not having enough money to pay the amount due on their returns. Fortunately, they are provided with the choice of filing a missing return or back taxes. Its major benefits include not being imposed with the substantial penalty of 25%, the fee for late filing. In some states, failing to do this legal obligation further penalizes you with even more substantial fees even if you actually don’t owe them anything.

If you are able to keep all of your tax information from previous years, a great deal of time and effort can be saved. What you just need to do now is prepare your tax returns. This is the stage though when you need professional help the most. Not knowing whether or not you owe back taxes, or knowing that you haven’t settled these can be a burden. This is why some clients feel that merely setting up an appointment with a tax professional to help them through the maze of forms and procedures is utterly consoling already.

People must, on the other hand, recognize that they cannot file back taxes through e-file or other electronic filing methods. These must be hand-delivered or sent through mail. When they are mailed, they must be sent using certified mail in order to document that the IRS received your tax returns.

Those who are aware that they owe the IRS some amount of money will most likely be required to pay interest and other applicable penalties. If this is the case, the IRS can aid in the setting up of a payment plan.

Filing for back taxes can actually be a relatively quick and easy process. What would make matters complicated is if you will refuse to immediately deal with the issue and file or pay back taxes. At worst, these IRS issues may cause you to owe significant amounts of money and face more severe consequences.