How to take care of your late state tax returns
If you get behind on federal income taxes, the IRS lets you know. When you have past state tax returns to file? Not so much. States have a way of getting behind on taxes, which creates massive deficits, which makes it harder for them to do stuff like repair your highways. It can also mean that they have a bunch of refunds to hand out, but not the know-how or manpower to contact the people owed.
That’s right: if you have past state tax returns to do, you might be missing out on getting your own money back. And if you owe money, you may not have any idea until they start repossessing your house. What’s a taxpayer to do? Here are some steps to take:
- Make sure you have past state tax returns to file. Even if your state sent you a letter, they could still have it very wrong. It’s always a good idea to verify when someone sends you a letter demanding money. Make sure it’s actually you who owes the money and make sure the letter actually came from your state IRS first.
- Find out what your state laws are. The rules for filing past state tax returns vary from state to state, so make sure you know yours! It could be that there is a statute of limitations past five years. It could be that you aren’t eligible for a refund after a year. The fines and interest involved also.
- Request any relevant W-2 forms from your employer. If you do owe past state tax returns, you need the information to complete them. If you haven’t held on to your old W-2′s, you’ll need to request a copy from your employer or former employer before starting to fill out the old returns.
- Contact a tax preparer, if necessary. E-filing and online taxes has made it much easier for the average person to do regular tax returns these days. However, past state tax returns are a whole ‘nother can of worms, varying because of state law, how much you owe (or how much is owed you), how past due the returns are, and so on. It can be a lot for a person to handle on their own, especially when it comes to negotiating payment. Using a tax preparer–even just an online service that specializes in past tax returns can be a lot of help when filing those past state tax returns. If you get fed up, consider bringing in reinforcements.
- Breathe. Having to deal with past state tax returns can be a big, long challenge. However, it’s one that is totally worth it for your financial future. It can improve your credit score, help get you out of debt, and even give you some money. So while you’re filing those returns, don’t forget to relax. You’re doing the right thing and it will be over soon.
Photo via David Blackwell. on Flickr.