If you have previous tax returns that have not yet been filed, it is imperative to get them filed immediately. The longer you wait, the more fees and interest are building and adding to the amount already owed. Consider the following when filing prior year tax returns:
Did anything happen during the prior year that could affect your taxes that does not normally happen? Examples could be receiving an inheritance, winning the lottery or other large prize, moving, major illness, starting your own business, having a baby, or giving a sizeable donation to charity. Smaller versions of these types of things could be easily overlooked if they happened in the beginning of the previous year and are not common occurrences.
Need for a Professional
Consider if you may need to enlist a CPA to assist in filing prior year tax returns. Even if it seems you do not, the truth is that you probably do. There are so many intricacies involved with filing prior taxes that it behooves almost everyone to take advantage of any expertise available from a CPA. They are specially trained to recognize potential mistakes and stop them from being made.
If you had extreme extenuating circumstances, by the IRS’s standards, you could qualify for abatement or for a settlement that is less than the amount owed. Known as an Offer in Compromise, this is hard to get approved but is available in certain circumstances. Other options include two different installment plans. One is a standard equal installment payment plan lasting 3 to 5 years. The other is a step-up plan in which the payment amounts increase over time.
Give thought to each of these before beginning the process of filing prior year tax returns. Be honest, and do what needs to be done to get them filed and get it done right the first time. Enough time has already been wasted, and time is money in this situation more than others. By making note of special situations that occurred during the tax year, considering enlisting professional help, and knowing your payment options, you will definitely be starting on the right track.
We are a CPA firm and we deal specifically with clients who need help filing prior tax returns. Have Questions? Call us now for a FREE consultation at 1-888-570-1033.
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