Haven’t filed taxes in several years? Need help with back taxes?
Don’t panic. You’re not alone. There are millions in the same boat. Just because you have unfiled taxes does not mean that the IRS, or State, does not know or has forgotten.
Why You Should File Back Tax Returns
If you have a filing requirement and do not file your tax returns timely you could be hit with penalties and interest.
Let’s talk penalties for a second. Not filing a timely federal tax return can result in a penalty of 5% of the amount due on your return for each month the tax return is late. The penalty is capped at 25%.
In addition, unfiled tax returns are one of several red flags for audit. The IRS recently announced that they will be stepping up their efforts in going after people who have unfiled tax returns.
There are several ways that the IRS discovers that a taxpayer has unfiled tax returns including W-2’s from the employer or Form 1099’s. In certain instances the IRS will file a tax return on your behalf if you fail to do so. This type of filing is called a substitute for return (SFR). The SFR is typically not done in your best interest because it likely does not include all of the write offs and credits that may be available to you.
What Happens When You Owe Back Taxes
If you have already filed your tax returns and have back taxes that you owe don’t bury your head in the sand! Unpaid taxes can result in liens and levies. The last thing you want is to have the government coming after your assets or future income because of back taxes. If this is you don’t panic. Call us today to see what options are available to you.