Approximately 8.2 Million Americans owe back taxes. So you are not a minority if you have gotten behind in filing taxes. But there is work to be done to get your tax situation back on track. There are a number of reasons why people owe back taxes. Some of the most common include:
- Forgot deadline (busy schedule)
- Confused about how to complete taxes
- Had a death or debilitating illness in family
- Busy as active military
- Records have been lost or destroyed
If you owe taxes and are seeking the best way to file them, you should seriously consider working with a trained tax professional. Why? At Pacific Tax & Financial Group we find that most individuals cannot simply collect all of the required information and write a check to the IRS to cover what they owe. Most find it more financially viable to construct a repayment strategy. However, there are 4 basic things that make up the short path to filing back taxes. Take a look at them below or call us if you suspect that handling your back taxes will be complicated. (760) 471-2040
One: Get Your Tax Documents In A Row
For every year that you’ve missed filing taxes, you’ll need your income forms (W-2s and/or 1099s) for each year. Any items that you wish to use as credits or deductions you’ll needed documentation for as well. Finding original documentation can be problematic sometimes, so we recommend that you try to find alternative documents. For instance, if cannot find receipts for some items, try to order old credit card or bank statements to prove the purchase.
Make use of the IRS Form 4506-T (Request for Transcript of Tax Return) when you cannot locate W-2s, 1099s and 1098s. Note: It take the IRS about 45 days to get this back to you.
Two: Acquire Each Year’s Tax Form
Back taxes must be filed on the original forms for the corresponding year (i.e. 2014 tax information on a 2014 Form 1040). Download the files for free from the IRS as most software programs and online services will require a purchase.
Three: Prep Taxes For Each Year
Follow the instructions for each year implicitly remembering that there are changes in tax laws that might affect your final owed amount.
After you have checked your work, submit your forms and await the IRS’s confirmation. They will forward a notice to you with the amount of the penalty including interest charges.
After you get to this point, it is again best to seek the help of a tax professional who can determine if there are ways that you can defray the costs of your penalties. Remember, nearly everyone’s tax situation is different so going by hearsay (especially from a non-tax professional) should be taken with a grain of salt. If you need tax assistance call us. We’ve help individual tax payers and businesses to get back on track with owed IRS taxes.
Securities and advisory services offered through NATIONAL PLANNING CORPORATION (NPC). Member FINRA/SIPC a Registered Investment Adviser. National Tax & Financial Network Inc, Pacific Tax & Financial Group Inc and NPC are separate and unrelated companies.
NPC does not provide tax advice.