The Fundamentals of Back Taxes Filing
People do not file their taxes for many reasons. But while some reasons are valid, the IRS still requires that late and back taxes be filed. Late taxes include those that should have been filed for a particular year and back taxes are those due since the mid 1980s. The best part of doing this is avoiding possible problems that you may have with the IRS.
There might be occasions when all tax records are not available. This occurs in cases of fire, flood and other natural calamities when all of a person’s belongings, including tax records, are damaged. The good news is that a tax attorney or an accountant can help in the reconstruction or retracing of a client’s tax records dating as far back as 15 to 20 years ago. These alternatives make the area of back taxes clearer.
Some people would have wanted to dutifully pay for their taxes but certain situations, like not having adequate funds to pay the amount due on their returns, prevent them from doing so. Luckily, they are provided with the choice of filing a missing return or back taxes. If you do this, you will not be charged with the fee for late filing, which is a substantial 25%. In certain states, failing to do this legal obligation further penalizes you with even more substantial fees even if you actually do not owe them anything.
You will definitely save a great deal of time if you were able to keep all your tax information from previous years. What you just need to do now is prepare your tax returns. This is the stage though when you need expert help the most. Not knowing whether or not you owe back taxes, or knowing that you have not settled these can be a burden. Clients have commented that just making an appointment to meet with a tax professional who can help them sort through the maze of forms and procedures makes their worries go away.
What many people do not understand is that they cannot file back taxes through e-file or other electronic filing systems. These must be submitted through hand delivery or mail. A certified mail is preferred on order to have proof that the IRS has received your tax returns.
Those who are aware that they owe the IRS some amount of money will most probably be required to pay interest and other applicable penalties. If this is the case, the IRS can aid in the setting up of a payment plan.
Filing back taxes can be relatively quick and simple depending on a person’s specific situation and other characteristics of his/her case. However, prolonging to deal with the situation and not filing or paying back taxes will only make matters worse. It can result to an increase in the amount of money due and worsening of penalties that can be imposed on you.
Filed under Blog by on Oct 27th, 2009. 