If you think you are one of only a small group of people who have not filed income tax returns over the past several years – think again. You are not alone – and waiting or putting it off can only make matters much worse when it comes to the financial penalties that can be assessed by the Internal Revenue Service. The truth is, the IRS is not so much interested in prosecuting people who are delinquent in filing their tax returns as they are interested in just getting the money owed the government.
So, here are five relatively painless steps you can take to get your tax returns filed:
Step One – Organize your paperwork for the years in which you have failed to file your tax returns. This will include all W-2 forms as well as documents of any other income for those years, as well as any receipts that you may have.
Step Two – Decide whether to hire a professional to actually prepare your tax returns. Generally speaking, if you have not filed tax returns for more than a single year, hiring a tax professional will most likely save you money in the long run. A certified public account will most like have the software for the proper forms for the years in question and the software will also help organize your preparation and catch any tax breaks you have coming.
Step Three – Have your tax professional look for ways to protect any tax refunds that you may have coming. Mostly likely, if you do have back taxes due, the IRS will seize any refunds you have coming and apply the funds to the back taxes, but a professional can walk you through the process that will insure what you have coming will get to you. strange as it may sound, it is even possible that by filing late, you could have a bigger tax refund coming than your thought.
Step Four – Make sure to pay any tax debt you owe as soon as you can. You may be able to pay your back taxes all at once, but if not, make arrangements. Often the Internal revenue Service will allow taxpayers to make monthly payments and charge only a nominal interest rate on the outstanding balance of taxes owed.
Step Five – Start planning for next year’s filing early – as in now. Just taking a few minutes each month to organize receipts and other tax documents, as well as review your ongoing tax situation for the year will make it much easier when it comes time to file your taxes – on time.
And remember one thing; when dealing with the Internal Revenue Service, it is better to correspond by mail rather than over the phone. A phone call provides no record of the conversation, whereas as letter, especially if it is a certified letter, will be a permanent record of what was discussed with the IRS and any agreements that were made.
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