Do you need to file back taxes? If you missed a return in the past your answer should be yes. The IRS requires that you file a return every year, and even if you think you can get away with not doing this you are wrong. Filing back taxes is not as hard as some people believe. You can do this easily enough if you know the steps to follow.
1) Gather all the documents needed to file for the year you missed. This includes your W-2, 1099’s, receipts, and bank statements among others. The more information you can dig up the easier it will be for you to file your back tax return. If you cannot find old W-2s you can either contact the company you worked for during the years that are missing or you can contact the IRS. The IRS may have this information because it is very likely that the company you worked for reported exactly how much they paid you to the IRS so they can take as a tax deduction. If you have no luck at finding your documents this way it is possible to file a substitute W-2 which will estimate your earnings.
2) Fill out the form that matches the year for which you did not file. It is important to realize that you need a different form for each year. In other words, if you have back taxes for two years you need to use two separate forms – the IRS does not allow them to be combined. The IRS website can supply you with the form for the proper year. Be sure to claim proper deductions, credits, and exemptions in order to reduce the total amount of taxes you owe, especially if you are re-filing a tax return that the IRS already filed for you. When the IRS files a return on your behalf they don’t give you the benefit of the doubt on anything and will not take any deductions, so if you are re-filing, you must take deductions to get down the liability that they IRS claims you owe.
3) Hire a tax professional. This is not mandatory, but something that many people do. Filing back taxes is a bit more involved than doing so for the current year. This is due to the fact that time has gone by, you may not have all the information you need, and you may owe money or be owed a return. Hiring a tax professional can speed up the process and help to ensure accuracy and efficiency. It will cost you some money, but in the long run it is beneficial. A tax professional can also help you get deductions you would not have seen or known to take and most of all, they can help you eliminate or lower any penalties that you will be charged for filing late.
4) Sign and date your return, and then send it off to the IRS. Do not delay in doing this; you have waited long enough. Make sure you send to the appropriate address. You must send the return address listed on the return.
5) If you owe money, decide how you are going to pay. Do you have the money to pay in full? Do you qualify for an installment agreement? Even if you do not know how you are going to pay, make sure you still file your return.
These five steps will help you to file back taxes.
Find more information on filing back tax returns. Need help? Our professionals can assist you with unfiled taxes.Article Source:http://www.articlesbase.com/finance-articles/5-steps-to-follow-when-filing-back-taxes-1770707.html
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This post was written by MoMoney on January 23, 2010
