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William Perez

Filing a Late Tax Return

By January 19, 2007

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Today's tax question comes from "John Doe" in New Jersey. He asks:

"I am 26 years old and I have never filed a tax return. This has been eating at me for the past four years. I thought I was automatically a felon after the first year of not filing, and feared litigation so I kind of buried my head in the sand after that. Well no more. I finally got the courage to do an internet search for back taxes, and found your site.


It seems that there is hope yet. What do I need to do? I worked part time in 2001 - 2004, and worked full time from mid-2004 to present. I have never been self employed, have never had any investments, owned any properties, or made any income other than from the work I just mentioned. I have lived alone, renting apartments the entire time as well.


Is the only tax document I need to file back taxes a W2 from each of the years since 2001?"

 

There is indeed hope for you, John Doe. In fact, I would guess that you might even have some tax refunds coming your way. But you will need to act fast, because tax refunds expire after three years. Here's how to file your tax returns and protect your refunds.

Filing a late return can be stressful. And the stress is made worse because now you have several years of tax returns to prepare, instead of just one. But if you can spare a couple of weekends, you can catch up with the IRS.

The key ingredient to successfully filing a late tax return is finding all your tax documents. If you have your original W-2 forms, you are in great shape. But if you are missing any tax documents, the Internal Revenue Service can help you out. The IRS has copies of all tax documents filed under your Social Security Number. The agency usually keeps four years worth of tax documents in their computerized archive. You can call the IRS and ask for a transcript of your documents to be mailed to you. Now, here's the really important thing about these computer printouts. The printouts will not show any information related to state income tax withholding. Since New Jersey has an income tax, you should try to find your original W-2 forms or call the to see if they have any information about your state withholding.

You have three years to claim a refund, and this is the second most important thing to know about late returns. The three year period starts with the original filing deadline. After the three-year period is up, the IRS cannot send you a refund check. Your refund has "expired" (so to speak). Right now, your 2003 tax refund will expire on April 15, 2007. (The original deadline was on April 15, 2004, plus three years.) So if you are pressed for time, please file your 2003 tax return first, before anything else.

So far I've been taking about refunds. I'm guessing that you have a refund because your only source of income was from various jobs, and so you probably had taxes taken out of your paychecks. Here's a little known fact about late returns. If you have a refund, there's no penalty for filing the return late. That's right, no late filing penalty and no interest.

Penalties kick in only if you owe the IRS. And if you owe, the IRS will assess not just one but three different penalties. There's a failure to file penalty (a stiff 5% per month that you are late, up to a maximum of 25%). Then there's the failure to pay penalty (a much milder half-a-percent per month). And then there's interest on the taxes you didn't pay (currently at 8% annually, and the IRS sets the interest rate every quarter).

Now, here's some tricks I have learned over the years of helping many people get caught up on their taxes. If you don't have your W-2 forms and you are using the computer printout from the IRS instead, you will need to transfer all the same information on the printout to (PDF). If you are using tax preparation software, you should add that form to your tax return and type in the relevant information. You also need to sign Form 4852, and you should attach a copy of the IRS printout (that way the IRS will know that you have a reliable source for the numbers on your tax return).

A second trick I learned is that you can find tax preparation software for older years. Here's a list of prior-year software that is available right now: (back to 1992), (back to 2000), and (back to 2002). Now, each software program has it's pros and cons, but all three will suit you well for preparing your tax returns. If you are going to prepare the returns yourself, you will want to use the same brand for all the years you need to file. This way you can easily import your tax information from one year to another, saving you time from repetitive data entry.

You can also find going all the way back to 1990 at IRS.gov.

You might also want to talk to a tax professional. Be sure to protect yourself first. Here's before hiring a tax accountant.

Let us know how everything turns out. I'll be rooting for you.

More information:

 

 

 

Comments
January 22, 2007 at 11:32 pm
(1) B says:

I’m passing along a comment from “B,” who wishes to remain anonymous. She says, “A warning from my experience: File each year separately and with separate checks.” I agree. You should mail each tax return in a separate envelope. And if you are paying, each check should indicate the year you are paying. And remember to send everything by certified mail with return receipt.

January 25, 2007 at 8:51 am
(2) my name says:

Don’t file. If you have never filed, you are “below the radar” of the IRS. Stay below radar and you may never, ever, need to deal with them.

The IRS computer system is hopelessly flawed and 1960′ish, so as long as you don’t wave with a big red flag they will not see you.

August 15, 2011 at 1:05 pm
(3) Tax Payer says:

Horrible, horrible advice my freind… This kind of philosophy is exactly what can keep you out of a valuable tax return. More often than not, unless you already make lots of money, you will get money back… plus this stategy is costing the US government millions of dollars every year. Please pay taxes or move to Canada :P

January 25, 2007 at 9:32 am
(4) Khaled says:

you have a grammatical error in the 3rd paragraph, it’s not caught, its catch up.

January 25, 2007 at 12:54 pm
(5) taxes says:

Khaled, thanks for catching my error. It is now corrected. “My name,” I disagree with your comments about not filing. I have seen the IRS assess huge penalties on late filers, where if they file a return, the penalties will be minimal. Most late filers are due a refund, so it really is in their best interest to file a return and get their money back from Uncle Sam.

August 11, 2008 at 6:58 am
(6) GratefulDeadHead says:

Thank you so much, “Taxes”. You’ve cleared up so many of my questions.

December 12, 2008 at 11:30 am
(7) latanya brown says:

it is not true that the IRS will not issue late filers interest, i received interest on two refunds check and i filed the federal returns about 3 years late.

December 16, 2008 at 7:04 pm
(8) taxes says:

Latanya, in my experience the IRS only issues refunds when they have delayed in processing the refund check.

March 12, 2009 at 5:41 pm
(9) LAte in TN says:

Thanks for the great info. I have always paid taxes through employer and have always got a refund. I am about to file for the past several years. I have rental props that have some depreciation aspects. I know there are returns older than 3 years that i can not claim a refund on. Can i just not carry the depreciations on them, which will reduce my refund (but I still will show one) and continue the depreciations on the returns i will get a refund? Or does the depreciation cycle have to be continious? Thanks in advance for your opinion!

March 16, 2010 at 7:28 pm
(10) carly says:

I have paid my taxes on time every year including 2009….. except one yr 2006 i did them but forgot to send them in……i guess because i just found them when i recently moved wondering if i should still send them!!! i am pretty positive i don’t owe as i was a full time student at the time

May 1, 2013 at 5:14 am
(11) Grateful says:

I know this post is old, but it helped me out today! Thank you so much! Your advice is well-worded and easy-to-understand!

I recently filed my 2012 taxes and read here that I could still file my 2011 taxes (which I forgot to file last year because of some personal matters). I filed and should (hopefully) be receiving $1000 from a refund I thought I had missed out on due to its late-filing status! I won’t forget to file again (we hope), but it’s good to know that if I’m expecting a refund there is no penalty if I’m late! :)

Thanks again!

May 6, 2013 at 3:18 pm
(12) William Perez says:

You’re welcome.

September 12, 2013 at 3:09 pm
(13) Late2k says:

I did not file one tax return back in 2000. Do I have to file if its more than 10 years ago?

September 12, 2013 at 4:11 pm
(14) William Perez says:

As a general rule, a person is required to file a tax return if the person made over a certain amount of income. This filing requirement threshold changes a little bit every year. For the year 2000, a single person is required to file if he or she earned over $7,200 for that year. See the <a href=”http://www.irs.gov/pub/irs-prior/i1040–2000.pdf”>Year 2000 Instructions for Form 1040</a> for further details.

As a practical matter, call the IRS and ask. Also, since the return was due more than 3 years ago, any refunds from the year 2000 have already <a href=”http://taxes.about.com/od/backtaxes/qt/statute_limits.htm”>expired</a>.

January 7, 2014 at 5:19 pm
(15) Carolyn says:

I file my cousin’s return by efile in NJ every year – not as a paid preparer, but because she isn’t a computer person. For some reason, I didn’t print out the confirmation for 2009. She received a letter from the NJ Division of Taxation saying she never filed. Here are my concerns:

1. I went to the NJ website and printed out the 1040 for 2009 and the instructions. She was due a $99 refund that year. If I have her mail in the form and the W-2′s (she only has 2 and no other reporting info), and it turns out that we already did file, will there be any repercussion?

2. I would have needed her 2009 filing information to complete and electronically file the 2010 return, for which I have a confirmation.

Any advice on how we should proceed?

January 7, 2014 at 6:51 pm
(16) William Perez says:

Carolyn, good question. I’m not an expert on NJ taxes. But in general, what you said makes perfect sense. NJ is claiming your cousin didn’t file. The best way to address the state’s concerns is to file the return. So if your cousin has a copy of her 2009 NJ return, then make a copy of that and mail it to NJ. The state will process the return and clear out the case. Usually state agencies will send a letter after the return is processed to let the person know the return was processed and whether a refund check is on its way or if there’s any late penalties. Finally, be aware of what the statute of limitations are for tax refunds. Generally, it’s 3-years from the original due date of the tax return. (That is, the 2009 return was due April 15, 2010, plus 3 years is April 15, 2013. For 2009 returns filed after that date, refunds generally cannot be issued. Now that’s the federal rule. As far as I know, it appears that NJ also follows this same 3-year rule for state refunds. But you’ll want to double check with NJ to make sure.

February 18, 2014 at 2:33 am
(17) Hopeful says:

How long will it take the irs to process my late return? They are holding my 2013return until my 2011 is recieved and processed

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