Taking Control of Your Back Taxes If you haven’t paid your taxes yet. It’s still not too late to turn them in; however, there are several important steps to take to ensure that all goes well for you on your taxes.
1) Pull out and Examine your Last Tax Return
First, bring to your table a copy of your last tax return. Then, bring together W-2s and other documents that you need in order to file. If you need any tax documents to file, you can get the documents you need from the Internal Revenue Service and these documents are free. Then, you need to prepare your tax returns or seek help from an attorney or other tax professional. A professional tax preparer can help you gather and complete the tax paperwork. In addition, a professional tax preparer can give you advice and counsel on how to prepare taxes that are late.
2) Be Aware of Audits, Refunds and Debt Collection
Keep in mind that, when you prepare late tax returns, you need to follow certain time limits for audits, refunds and debt collection. It will be important to find out how long it will take to receive refund checks because, if you any money on previous tax debts, you will need to know how much your refund checks will be to pay them off.
3) How Will you Pay off your Debts?
In addition, you will need to draw up a plan on how and when you will pay off your tax debts. You will also need to know and understand how you can protect yourself from an assessment, lien, levy or and IRS investigation. This can be done by getting professional information from a tax professional and by talking with the IRS. Monthly payments can be made to pay off the owed amount.
5) How to Handle your Taxes in the Future?
Then, think about how you want to handle this situation in the future. Review carefully your taxes and think about plans to reduce your taxes and how you can better handle your financial needs. Keep in mind, too, that your late tax returns need to be filed on paper. Then, they need to be mailed to the IRS Service Center. Tax software can be used to complete this process; however, filing late returns should not be filed electronically.
Also, be sure to mail in your tax returns in individual envelopes and then always send them by certified mail. This will ensure that both were received by the IRS. If possible, turn in your late tax returns in person at your local IRS. Be sure to also make photocopies of page one on each tax return and take those copies with you.
6) Apply for an Extension
It is important to also keep in mind that you can apply for an extension in filing your taxes. You can avoid a penalty by applying for an extension. Also, if you are going through a difficult financial time, you can ask the Taxpayer Advocate Service for help. In addition, as you continue to work on your taxes, make sure to write down the correct Social Security number for you and your spouse. Go over all documents—especially your math, before turning your work in. Mistakes in names and numbers can slow down the tax process, significantly.
Bill Watkins is an accountant from the South, where he enjoys boating with his grandson, going for long walks with his trusty Australian sheep dog, Skip, and is ecstatic about the great deal he got on the home insurance for his new retirement home at http://www.homeownersinsurance.org/
- The Benefits of Using Online Tax Software (2009taxes.org)
- Why You Need to Hire Someone to Prepare Your Tax Return (2011tax.org)