What should I do if I haven’t filed my taxes? Is it possible to file back tax returns?
Getting up to date
The first thing to do if you have unfiled taxes is to gather everything together and plan to get the taxes up to date. The IRS calls this getting into compliance.
There are many good reasons to file your taxes on time. If you are due a refund, it is always better to have your money earlier than later. Recently, those who didn’t file their taxes didn’t get their economic recovery payments (the stimulus checks). Also, those who have children who qualify haven’t gotten the advanced payments of the Child Tax Credit.
You may qualify for credits on those returns as well as your refund.
Can I still get A Refund?
The IRS allows you to file a tax return to request a refund for three years after the due date. (You get extra time if you had an extension on the original return.) This means that the last date to get a refund from 2017 was May 17, 2021. (Different rules apply to amended returns.)
If you didn’t receive your “stimulus checks” it could be that you have not filed. To receive the benefit of the first two checks you need to file your 2020 return. Those checks are reconciled, “settled up,” on that return. If you missed out on the third check, you may need to wait until you file your 2021 return next year.
I had a client last week who wanted to know why she wasn’t getting her advanced Child Tax Credit payments. Two reasons: she didn’t file a 2020 return (nor the year before) and the IRS doesn’t know she had a baby in June. The solutions: file the 2020 return; and go to the tool on the IRS website to let them know about the baby. (Updating this info on this tool is a feature they are still working on. The IRS expects it to be ready at the end of September.)
There are many other reasons to file your taxes on time.
There Could Be Penalties
Penalties and interest. Even though you can only claim a refund back three years, the IRS can go back even further in the past to assess tax. Late filing penalties and late payment penalties can be up to 25% of your tax bill, and the interest on that bill keeps adding up until it is paid up.
Liens and levies. The IRS attaches an automatic lien on most unpaid taxes. When the taxes go unpaid the IRS can levy bank accounts and garnish wages. There are ways to get this to stop. If you are experiencing any of these situations and need help with this, our office offers tax resolution services. Call our office so we can help formulate a plan.
Peace of mind. From experience I have found that having peace of mind is worth the time, effort, and cost.
If you need to file back tax returns, First City Income Tax can file back taxes and help put together a plan to put back taxes to rest and get you back on track. Call our office in Savannah 912-335-5404.