What To Do If You Did Not File Your Taxes

Let’s face it, sometimes life gets in the way and we do not file our taxes. Unfortunately, one year turns to two , and so on. Then it becomes a mountain that many people never seem to overcome. What is interesting is that some people even get refunds. They just cannot seem to get past the fear.

What is there to fear?

The fear is usually about how much penalty and interest will have accrued since the due date. Not knowing this amount scares people. Fear of the unknown.

Unfortunately, the amount goes up every day. The penalty is capped at 25% of the actual tax owed, but the interest is not. In fact, after over 40 years of doing taxes, I still cannot figure out how the IRS calculates their interest!

What do you do next?

If you didn’t file your taxes, seek help right away! Chances are it’s not as bad as you think. I’ve had people come to me with 6 years of overdue taxes and they have come out ahead!

The bummer is that the IRS only allows you to claim a refund for three years back, but makes you pay what you owe as far back as it happened! So, you could lose out on refunds that you had. Most times, people just need some structure to get their ducks in a row. A good checklist and simple instructions can accomplish this quickly.

Waiting till you need your taxes to buy a house or get a loan is not a good time to try to scramble! In fact, many people who prepare taxes will end up charging you a premium.

What if I can’t pay all I owe?

Most times, people who do not file end up owing the IRS. They do not file because they believe they have to pay all at once. Not True.

The IRS will allow you to go on a reasonable payment plan. The key is to stick to it 100%. Nobody likes to get shafted. Pick a monthly payment amount you know you can meet and never miss a payment. Yes, interest will still accrue, but it’s better than more trouble with the IRS.

If you are in need of past filings, just give an email to steve@do-my-taxes.com

Cheers

Steve