Why Filing Your Taxes Matters
Stop IRS penalties for late filing and late payments. The longer you delay, the more these penalties can add up. In addition, interest accrues on any unpaid tax from the due date of the return until the date of payment. File as soon as possible to minimize these extra costs.
Protecting Your Refund
If you’re owed a refund, you only have three (3) years of the original filing deadline to claim it. After that period, the government keeps your money. Missing out on a refund is essentially giving away your hard-earned cash.
Maintaining Financial Health
Many people need tax returns for other financial activities, such as applying for loans, mortgages, or financial aid. Lenders and institutions often require copies of recent tax returns to assess your financial stability.
Avoiding Legal Issues
Persistent non-filing can lead to more severe consequences, including tax liens, levies, or even criminal charges in extreme cases. It’s always better to address the issue voluntarily rather than waiting for the IRS to take action.
Steps to Take if You Haven’t Filed
Gather Your Documents
Start by collecting all relevant financial documents, such as W-2s, 1099s, and other income records. If you’re missing any documents, you can request copies from your employer or you can sign up for a free account to get this information from the IRS.
File Your Late Returns
You can file late tax returns for any past years using the same forms as if you were filing on time but be cautious to include all information reported to the IRS by others gathered on your account transcripts. If you’re unsure how to proceed, consider seeking assistance from a tax professional who can help you with this.
Consider a Payment Plan
Finally, if you owe taxes and can’t pay the full amount, don’t panic. The IRS offers payment plans and other options to help you manage your debt. You can apply for an installment agreement, which allows you to pay off your tax debt over time. There are other options as well.
Seek Professional Help
Tax laws can be complicated, especially if you have multiple years of unfiled returns. A tax professional can provide valuable guidance, help you understand your obligations, and negotiate with the IRS on your behalf if necessary. It’s affordable, you get the best advice from someone who does this every day, and most importantly, you know it’s done right.
Tips for Staying Current in the Future
Set Reminders
Mark important tax dates on your calendar or set digital reminders to ensure you don’t miss future deadlines.
Make Smaller Estimated Tax Payments
Chances are that if you owe taxes, you’re going to owe taxes for the current tax year as well. You can make optional estimated tax payments in smaller, manageble amounts, so the problem doesn’t repeat itself.
Organize Your Records
Keep your financial documents organized throughout the year. Create a dedicated folder or use digital tools to store all your tax-related paperwork.
Consider Professional Help
If your taxes are complex or you find the process overwhelming, hiring a tax professional can save you time and stress. We would love to help you.
Final Thoughts
Filing your taxes, even if you’re late, is a critical step in maintaining your financial health and avoiding complications with the IRS. By taking prompt action, gathering your documents, and seeking help if needed, you can get back on track and ensure you’re meeting your tax obligations.
Remember, it’s never too late to take control of your tax situation. The sooner you act, the sooner you can resolve any issues and gain peace of mind.
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