If you don’t file your past year taxes you may not receive your 2014 tax season refund!
In October, the IRS announced that the 2014 tax filing season is delayed this year. The start date for the season is January 31st. That means, you have more time to get previous year taxes filed that you haven’t yet gotten around to.
Filing past year taxes is super important for a variety of reasons. After all, if you were required to file in the past and never did, you can face fines and even serious charges!
The Reasons Why You Shouldn’t Wait To File Prior Late Taxes:
1. The IRS can hold onto your current year tax refund
If the IRS sent you a notice about needing to file for prior years, when you file current year taxes, the IRS will hold the tax refund until you meet your prior year obligations. This means, you have to file the prior years and pay the obligations for those years.
2. Your current year refund will be delayed if you haven’t file prior year returns.
3. There is a late filing tax penalty that increases with time along with a a failure-to-pay penalty. The failure-to-file penalty, which is a tax on filing late is higher than the failure-to-pay penalty. The failure-to-file penalty is normally 5% of the unpaid taxes for each month the tax return is late. This starts the day after the tax filing deadline date.
4. The failure to file is serious (and more serious than the failure to pay). It’s better to file late and not pay than to not file and not pay.
5. The IRS accepts many forms of payment. Low on cash and afraid of the tax you might owe? No worries, the IRS now accepts credit cards, making the process to pay more “possible” for you.
6. You only have three years to collect previous year tax refunds. The IRS Statute of Limitations allows three years from the original deadline of the tax return for you to collect your tax refund. That means if you are waiting around to file your 2010 taxes, stop waiting, the deadline to receive your refund for 2010 is April 15, 2014.
7. Peace at Mind. If you are aware of it or not, not filing prior year taxes is somewhere in the back of your mind, looming around and subconsciously stressing you out. Getting past year taxes filed will feel like a weight off your shoulders.
I’m Scared to File My Past Year Taxes
Filing prior year taxes can seem stressful and it might seem better to just put if off. Don’t wait any longer! Filing past taxes is not as bad as you think and regardless of how much tax you may owe for past years, it’s better to file and owe than to not file and have the IRS possibly garnish your wages! If you are worried because you can’t pay the IRS the taxes, don’t let this stop you from filing. The IRS will set up a payment plan with you.
How Can I File My Late Taxes?
If you have prior year returns that need to be filed from 2005-2012, PriorTax offers an easy to use online process to get the late taxes off your to do list. If you taxes before 2005 you want to file, you won’t be able to online. The IRS website does offer electronic forms dating back to 1998 that you can print, fill out and mail in.
Photo via JGTaxGroup on Flickr