Tax News Blog

1099-C Defined: Handling Past Due Debt

Posted by Michelle O'Brien on November 15, 2016
Last modified: November 15, 2016

So you’ve accrued a bit of debt. It’s not the end of the world.

Debt is stressful, overbearing and can build up quickly. When this happens, you may need to eliminate it altogether. In a situation when you need to cancel your debt completely, you would contact your creditor and they’d issue you form 1099-C, as shown below.

What is form 1099-C?

The 1099-C is also known as the Cancellation of Debt. The most common reasons that you would receive this form are as follows:

  • You’ve not made any payment on a debt for at least three years and there has been no collection activity for the past year.
  • You negotiated a settlement to pay your debt for less than the amount you owed and the lender/creditor forgave the remaining amount.
  • You sold a home in a short sale where the lender/creditor agreed to accept less than the full amount due to them
  • You’ve owned a home that entered into foreclosure with a deficiency (the difference between the value of the home and your debt on it) which was forgiven or remains unpaid.

What does each box on the 1099-C mean?

Tax forms, in general, are intimidating to most of us. The tricky language and minuscule text paired with our immediate panic can send anyone into a frenzy. Let’s break this form down box by box and see if all your questions can’t be answered. Read the rest of this entry »

Can I Deduct Overlooked Expenses from Previous Years on This Year’s Taxes?

Posted by Michelle O'Brien on October 26, 2016
Last modified: November 2, 2016

Lumping overlooked tax deductions in with this year’s return is hardly an option.

Generally speaking, you cannot deduct expenses from a previous year on this year’s tax return. You can only deduct expenses in the year that you paid for them.

Each tax return reports finances for its own year and each of those years needs to be kept separate. Deductions, income or anything else from a previous year cannot be claimed with the current year’s tax information.

*Note: One of the exceptions to this rule is the tuition and fees deduction. This tax break allows you to claim qualified education expenses from the previous year as long as they were for school sessions that began in January-March of the tax year you are currently filing for.

File an amended return if you can

If you’re completely gung ho on finding a Plan B, we may have a solution for you. You can file an amended tax return if you discover a tax deduction you missed in a previous year. What’s the catch? It needs to be a completely legitimate expense. On top of that, it needs to be within the three-year time frame from the deadline date the original tax return was due.

To file an amended return, here’s what you should do: Read the rest of this entry »

How Far Back Can I File Prior Year Taxes?

Posted by admin on October 26, 2016
Last modified: November 2, 2016

So, you ran a little late and forgot to file a prior year tax return?

Are you wondering if you can file a tax return all the way back, say, 6 years? The answer is yes, you can! This should not be confused with e-filing. The IRS has electronic filing available through October of the year your tax return is due. After that, taxpayers must paper file their returns; no exceptions. The good news? Paper filing your tax return is pretty much just as easy as e-filing. Instead of submitting your tax return online, you’ll need to print and sign it. Then, all you have to do it mail it to the IRS. Easy, right? You can file prior year taxes dating back to 2005 with PriorTax.

File prior year taxes for 2005-2015 on PriorTax

By law, the IRS may assess penalties to taxpayers for both failing to file a tax return and for failing to pay taxes they owe by the deadline. Therefore, if you have not filed taxes from 2005, 2006, etc. it’s best do so now (or as soon as possible) on PriorTax.

How many years back can you get a tax refund?

The IRS Statute of Limitations allows you three years from the filing deadline to file your prior year return and claim your refund. For example, the last day to claim your tax refund for the 2013 tax year is April 15, 2017. This is because the deadline date was April 15, 2014.

Keep in mind that they also have the same amount of time to audit you and up to ten years to collect any unpaid tax.

Read the rest of this entry »

Can I File My 2009 Taxes Online?

Posted by admin on October 20, 2016
Last modified: November 2, 2016

You can prepare your 2009 tax return online with PriorTax. 

Once, a long time ago, 2009 tax returns were due on April 15, 2010.

If you’ve been putting off filing your 2009 taxes since that initial deadline, you may wonder why you should bother filing at all?

There are a couple of good reasons you should do it.

For one, the IRS has 10 years to collect on any tax you owe. For two, tax penalties for filing late increase by the day and, by now, they have really built up. The longer you wait, the worse the situation.

The good news is that you can still prepare your 2009 taxes online with PriorTax.

Will I Owe the IRS Late Penalties?

If you owe the IRS from the 2009 tax year, plan on paying late penalties. These late fees include:

  • Failure-to-file: 5% of your tax due total for each month your return is filed late, up to 25%
  • Failure-to-pay: ½ of 1% of your unpaid taxes for each month or part of a month left unpaid (this amount is waived if you’re already facing the failure-to-file penalty)

The penalty for filing late can be ten times worse than the penalty for paying late. At the very least, file your 2009 return as soon as possible.

Then, contact the IRS to arrange to pay your tax bill. They can set up an installment plan that will work for you. Read the rest of this entry »

Can You E-File A Tax Return After the October Deadline?

Posted by admin on October 20, 2016
Last modified: November 2, 2016

Sorry if you missed that train. But you can still prepare your late return online.

You cannot e-file a prior year tax return. However, you can prepare prior year returns on PriorTax and send your printed return copy in the mail, to the IRS.

You can only e-file a “current year” tax return between mid-January when e-file opens and mid-October when it closes, the year after the tax year in question.

Each year the IRS shuts down their e-file system come mid-October. This is why you will need to send in a physical copy of your return to the IRS.

Read the rest of this entry »

Filing Taxes in Two States: Working in NY & Living in NJ

Posted by admin on October 20, 2016
Last modified: November 2, 2016

If you’re living and working in different states, plan on filing taxes in two states.

For many, working and living in different states can save you a lot of money. This is especially true if you work in an expensive city like New York City.

The commute from New Jersey to the Big Apple may be much more attractive to you, especially if you’re looking for more space, lower costs and fewer people.

However, you’ll want to keep in mind that those who work and live in different states are required to file taxes in both states.

In other words, you’ll need to file both a New Jersey and New York state tax return.

File a nonresident NY state tax return and a resident NJ state return

If you’re working in a different state than you live in, you’re required tofile:

  • a non-resident state return to the state you work in
  • a resident state return to the state you live in
  • a federal tax return Read the rest of this entry »

How to Check A Prior Year Tax Refund Status

Posted by Michelle O'Brien on October 20, 2016
Last modified: November 2, 2016

Go online and use the “Where’s My Refund” IRS tool. It works!

Although the IRS “Where’s My Refund” tool is available to check the progress of your return, it only applies to the tax return you filed for the most current tax year.

For example, let’s say you file your 2013 tax return and soon after remember to file your late 2012 return. Although you filed your 2013 taxes before your 2012, 2013 is going to be the one that the IRS site shows the status for since it is the most recent tax year in their database for you.

So how do you check your prior year tax refund status after mailing your return to the IRS?

Brace yourselves. A lot of you aren’t going to like Plan B. You’ll need to call the IRS. Of course, you don’t want to mail your return and call on your lunch break the following day. The IRS insists that you wait it out for at least 6 weeks after mailing your return to call and check on the status. When you call, make sure you have the following handy:

  • tax year
  • social security number
  • filing status
  • exact refund amount

You can call 1-800-829-1040 and follow the prompts for a live representative. The person that you speak with will have direct access to your tax return and be able to provide you with a status update.

Tip: Request a tracking number when mailing your return. It’ll give you peace of mind to know that it arrived safe and sound.

Read the rest of this entry »

The IRS Address to File Taxes

Posted by admin on October 18, 2016
Last modified: November 2, 2016

Mailing your tax return to the IRS? Don’t forget the stamp!

It’s 2016 and we are well into the era of e-file. In fact, the vast majority of taxpayers now send their return into the IRS electronically. However, there are some people out there who prefer to kick it old school and snail mail a paper copy of their return to the IRS. Alternately, if you are filing a late return from a prior year, snail mail is the only option.

So after you complete your return and breathe a big sigh of relief, make sure you know where you’re mailing your return. There’s nothing worse than scrambling to find out where to mail your return as the clock ticks down the final hours of the tax season.

Here is a list of each IRS address based on the state where you live. The list is complete with addresses of the IRS processing centers where you can mail your return whether you include a check or money order. Read the rest of this entry »

How To File 2012 Taxes in 2016

Posted by admin on October 18, 2016
Last modified: November 2, 2016

Feel like giving up? Take a deep breath: you can still file your late 2012 taxes!

Procrastination happens. Maybe you planned to file your 2012 taxes when they were due, but ended up putting it off until a later date. Now, it’s 2016 and you still haven’t filed your 2012 taxes. Sound familiar? The good news is you can file 2012 taxes with PriorTax. 

Yes, it will be considered late. However, it’s much better to file late, than to never file at all!

If the process of filing your late taxes is causing you mild stress, take a deep breath and simply follow our provided steps.

Read the rest of this entry »

How to File Taxes without a W-2

Posted by admin on October 18, 2016
Last modified: November 2, 2016

It’s easy to lose your W-2 and just as simple to file without it.

E-filing your tax return these days is pretty straightforward. You just plug in the numbers on your W-2 to the online  tax application, take the credits and deductions you’re entitled to, and VOILA! Couldn’t be simpler.

But what happens if you don’t have a W-2? Suddenly things get a lot more complicated. Don’t worry. There are steps to take to make sure you get your tax return to the IRS.

Contact your employer

First thing’s first. Make every attempt to get the actual document itself. If your employer didn’t send you one, or sent you one that was incorrect, contact them and request that they send you the right one.

Employers are required to have W-2 forms issued to their employees by January 31. If you still don’t have it by then, it’s time to take additional action. At this point you should call the IRS at 1-800-829-1040 and tell them about your missing W-2. They will call your employer and tell them to send you the W-2.

Read the rest of this entry »