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Back on Track – 5 Steps to Take Immediately If You’re Years Behind on Your Taxes

by Aishwarya
Back on Track - 5 Steps to Take Immediately If You're Years Behind on Your Taxes

Although filing taxes is a mandatory yearly task, some people neglect to complete it for one reason or another. Some people don’t file taxes because they can’t afford to pay what they owe. For others, life just gets in the way, and it doesn’t get done. Whatever your reason may be, skipping out on this obligation is a big deal to the IRS. 

The good news is, you can get back in the IRS’s good graces by getting up to date. Here are the steps you need to take immediately if you’re years behind on your taxes. 

  1. Consult a Tax Pro

The first step you should take is to find a tax agent. A tax pro can help you figure out which returns you need to complete and how to go about filing them with the IRS. There will be special forms you’ll need to fill out, and depending on how you plan to pay the debt you owe, your tax agent can help you make sure you’ve completed the proper paperwork and made the payments correctly. 

Dealing with the IRS, especially when you haven’t filed taxes in several years, can be tricky, so unless you know the tax laws yourself, don’t forgo asking a tax agent for help. 

  1. Figure Out How Many Years Back You Need to File

In most cases, the IRS will want you to file six years’ worth of taxes to get back in good standing. Sometimes, however, they will want you to file taxes for more than six years if there are large bills associated with those missing years, business taxes are involved, or a revenue officer is on the case and wants to investigate further. 

The easiest way to find out how many years you need to file is to call the IRS or have your tax accountant use a dedicated line to confirm which years need to be filed. 

  1. Understand that You Can Only Claim Refunds for Three Years Past

The IRS only has to pay you refunds for the previous three years of unfiled tax refunds. This means any refund you may have been entitled to beyond the last three years is now lost. Consider this a penalty for not filing your taxes on time, and use it as motivation to stay on top of this task in the future.  

  1. Gather All Your Wage and Tax Transcripts

You may not have filed taxes for a long time, but hopefully, you’ve kept all your wage slips or tax transcripts that show the withholdings and estimated tax payments you’ve made from your income over the years. This information must match what the IRS has on file. If not, they will question the accuracy of your returns. 

If you haven’t kept the transcripts, you can request copies from your employer or the IRS itself to complete your tax returns. If you’ve made any estimated tax payments, be sure your transcripts show these payments so they can be deducted from any balance you owe. 

  1. File Your Taxes

Your tax expert can help you fill out and file the required documents. Keep in mind that delinquent tax returns require special processing, which can take some time. If you can’t pay all that you owe, ask to set up a payment arrangement with the IRS

For one reason or another, some people don’t manage to file their taxes every year. If you’re one of these people, follow the steps above to get back in good standing with the IRS.

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