If you haven’t filed taxes in years, catching up can seem overwhelming. Here’s a quick guide to get you started and finished.
1. Gather Your Documents
Collect all necessary documents for each year you need to file, including:
- W-2s, 1099s and other sources of income: Income forms from employers, retirement accounts and others.
- Bank and Investment Statements: To track interest or dividend income.
- Receipts for Deductions: For itemized deductions like medical bills, donations, home interest and business expenses.
- Previous Tax Returns: For reference. Using a prior tax return as a guide can help avoid missing items.
2. Request Missing Documents
If you’re missing documents, request copies from the IRS (wage and income transcripts) or directly from employers and financial institutions. Many of these can be obtained electronically through company websites.
3. Use Tax Software, HIRE a Professional, Or Go Old-School and Fill out the Forms Manually
Choose between tax preparation software (many offer versions for past years) or hiring a tax professional for personalized guidance, especially if you have multiple years to file or complex situations.
If you are of the DIY bent, download and print forms from the IRS website for each year you need to file.
4. File Your Returns
- Paper Filing: Mail paper copies to the IRS using the correct address for each year.
- Electronic Filing: Some software allows e-filing for previous years. The IRS generally allows the e-filing for the past 3 years
5. Pay Any Taxes Owed
Pay as much as you can immediately when filing. In most cases the IRS offers payment plans (installment agreements) if needed. Be aware that interest and penalties will be assessed on taxes owed. The sooner you pay the tax, the less these amounts will be.
6. Monitor Your Status
- Refunds: File quickly to claim refunds, as there’s a three-year limit.
- IRS Response: Respond promptly to any IRS inquiries. You will most likely receive some type of correspondence from the IRS when filing a late return. Be sure to use your current address on all years filed.
7. Stay Current
Commit to staying current with future tax filings. Set reminders for deadlines, keep documents organized, and use tax software or professionals to ease the process.
Final Thoughts
Filing old tax returns can be manageable by taking it step by step. Start now to gain peace of mind and avoid future tax issues.
