Sometimes life gets in the way or stress takes over and you get behind on filing your tax returns. To help you get started, we have created a step-by-step guide to help you take the first steps to becoming compliant.
1.) Don’t Wait
The longer you wait, the more penalties and interest will accrue. Depending on your tax balance, you could start facing liens and levies or garnishments. If you’re owed a refund, you can actually lose your tax refund to the government after 3 years. Getting ahead of the curve will allow you to make the best decisions before your tax problems get worse.
2.) Contact a Professional
Each tax situation is unique, so yours may have different requirements in order to be resolved. Contacting a professional is the best way to determine your course of action. Tax debt can be intimidating, especially when you’re getting notices. A tax professional knows how to deal with the IRS and state tax collection agencies so that you get the best help and don’t get taken advantage of.
3.) Determine How Far Back You Need to File
The IRS only requires you to file the last six years in order to become compliant. However, in specific tax resolution circumstances you may have to file returns that go back further than that. Talking to a professional will help you create a solid plan that will allow you to file the correct returns.
4.) Gather Information
Dig through your filing cabinet, look through those drawers, and go through those boxes you haven’t opened since you moved. You’ll need to find as many tax documents as you can from past years to make filing easier. Your tax preparer may be able to download transcripts from the IRS and request them from the state, but having your own tax documents makes the process easier and much faster.
5.) File and Wait
After you file and your tax returns have been passed on to the IRS, there’s nothing left for you to do except wait. After your returns have been assessed, you can determine whether a tax resolution option is available to you, including an Offer In Compromise, Installment Plan, and Penalty Abatement.
Need help getting started in the process? Contact us to get a free consultation!