The Basics of Back Taxes

Not filing your taxes is one of those “cardinal sins” that we’re all taught not to commit. However, life and circumstances can and often do get in the way, which can lead to not having filed your taxes in a year or even several years. If you are in this situation and aren’t sure what to do, take a deep breath and try to relax. There is a way out, and often, that way simply begins with filing your tax returns. 

Do a Little Backtracking

The easiest way to make a fresh start, surprisingly, is to go back a little. Get your tax return from the last time you filed your taxes. Whether you still have the information available or you have to request tax documents from the IRS or former employers, the key is to gather old data that will be useful to you as you file current returns and figure out what you need to catch up on.

Catch Up

Once you’ve got the old information you’ll need, it’s time to dig into the new. File tax returns for the current tax year. While you can do it yourself, you’re much better off using a tax professional who can help you to file your returns and make sense of any back taxes that you may owe. If you have even the slightest doubt about handling your taxes on your own or if you just want to be sure you do everything right, remember that a professional is always your best bet.

Pay off Debts

If it turns out that you do owe the IRS money once you’ve filed, come up with a plan to pay them back. You may be eligible to sign up for a payment plan or to ask for a special offer in compromise. Your tax professional can be helpful in explaining the different options to you and in helping you to find the best one to meet your needs.

Once you’ve got your back taxes sorted out, the key is to work with your tax professional to make a viable plan for the future so that you never find yourself in this type of situation again.