3 Tips for Filing Past Due Tax Returns

At Edge Financial, we’re all about taxes. We Ooh! at a perfectly prepared tax return, and we Ahh! at a smartly deducted investment loss. (Yeah, we’re tax geeks. Jealous?) It’s because we’re such tax geeks that it simply pains us to see unfiled tax returns. And if you just stumbled across this blog, there’s a chance you missed a return or two somewhere along the road. So we’re ready to cover filing past due tax returns.

Taxes are intimidating, and many taxpayers will either miss a tax return or file late at some point during their lives. You may have been overwhelmed with personal events, complex income streams, or just plain blanked on Tax Day.

Regardless how got into this situation, the IRS wants you to file your past due tax returns.

In our experience, tax issues—unfiled returns, tax debt, IRS wage garnishments—tend to come in groups. So if you haven’t filed a number of your past tax returns, you may be risking even bigger consequences and debt in the future.

With that said, every situation is unique. Your exact tax situation may vary, and your first step back to compliance with the IRS is getting your back tax returns filed.

3 Tips for Filing Past Due Tax Returns

If you’re looking to turn over a new leaf with the IRS, we’re here to help! Before you jump in, here are a few things you should keep in mind.

1. Filing taxes and paying taxes are two separate things.

Tax issues often come hand-in-hand, but you shouldn’t mistake one for another. Especially when filing past due tax returns, it’s important to keep in mind that filing your taxes is not the same as paying them.

Filing taxes is an active process you have to complete each year, but you may not ever need to pay taxes. Depending on your withholding, you may not owe the IRS any money once it’s time to file. On the other hand, self-employed taxpayers estimate and pay their taxes quarterly—then file annually.

So, just because you haven’t filed your taxes, it doesn’t mean that you haven’t paid the IRS enough. Unfortunately, it doesn’t mean you haven’t accrued some tax debt.

2. Filing unfiled tax returns brings potential savings.

As frightening as it can be to face the music and deal with the taxes you may have left unchecked for a couple years, you may be surprised at how many benefits filing your past due returns can offer you.

To start with, you may have a tax refund waiting for you that you aren’t taking advantage of. Remember, you may not owe the IRS any money—and it’s possible you have money come back your way. Without filing, you can’t claim proper deductions and other tax credits. You’d hate to leave money on the table just because you didn’t file, right?

Another benefit of filing your tax returns is that in the instance you do owe money, in most cases there are opportunities to lower your tax debt. Since your employer has been withholding your taxes for you, the IRS already knows (more or less) what you owe them. What they don’t know about is those deductions and tax credits you can rightfully claim. By filing your old tax returns, you can make those claims and lower your tax bill.

3. You should plan and organize before you file.

We’re all for you getting back on track as soon as you can, but depending on your specific situation, it’s worth doing some planning before you file all your past due returns. Instead, try following these steps.

1. Note which years you haven’t filed. Maybe you just missed one year, or maybe you haven’t filed for a few. Regardless, take note of which years are outstanding. This will help you approach the next two steps before filing.
2. Get your paperwork in order. Whether you have one unfiled tax return or five, you’ll need to organize your paperwork before filing. W-2s, old pay stubs, and receipts—all your standard tax filing records—will help you when it’s time to file. Oh, and speaking of filing…
3. Get help from a full-service tax firm. When you’re filing past due tax returns, we don’t recommend companies like H&R Block—low-touch and cheaper companies that focus exclusively on tax preparation. Instead, look to full-service firms that deal with tax liability, handle audits, and have a team of tax attorneys.

Resolve Back Taxes Fast

The first step to getting back on track with you past tax returns is learning what to do next.

Hopefully, now you have a better sense of what you should be considering when filing your old tax returns. Whether you’re facing just one unfiled tax return or several, we understand it can be intimidating. We believe in you.

And that’s why we’re here to help.