We get it, life happens! For one reason or another your tax returns haven’t been filed and you want to get caught up again but may not know how! How many years do I need to go back? Will I get a trouble for waiting so long? What if I can’t find my original tax documents? What if I don’t do anything? These are the types of questions I answer for people who come into my Raleigh, NC office. The main focus of my CPA practice is income tax representation for individuals facing issues with the IRS or the North Carolina Department of Revenue. Below is some information on how to address the issue of back tax returns.
How Many Years of Back Tax Returns Do I Need to File?
In general, you need to file at least the last six (6) years of back tax returns. The IRS generally doesn’t have an interest nor the manpower to process returns beyond this time frame. However, there are many reasons why it may be advantageous to file beyond the six year time frame as by doing so may actually lower a previously assessed liability.
Will I Get in Trouble for Filing Back Taxes? What if I Don’t File My Back Taxes?
It is a common myth that “if I don’t file, then the IRS won’t know how much I owe”. In reality, it is only a matter of time before you receive a notice from the IRS or the North Carolina Department of Revenue regarding unfiled taxes. For some people the wait may be less than a year and for others it may be several years before they are contacted. The longer a person waits to the file the back tax returns, the larger the potential penalties and interest will grow. In addition, the ability to settle tax debt or enter into installment agreements hinge on having back tax returns filed. Therefore, filing the back tax returns sooner rather than later is highly advised to preserve options to resolve IRS tax problems.
What If I Lost My Tax Documents to Prepare Back Taxes?
We often assist clients with ordering a set of tax transcripts directly from the IRS. The document reports payments made to you under your Social Security number (i.e., W-2 wages, 1099-MISC independent contractor/consultant income, 1099-R retirement income, etc.) as well a few payments made by you (i.e., 1098 mortgage interest, 1098-E student loan interest, etc.). Another option to find back tax documents is to call the issuer directly to see if they can provide new copies.
If you or someone you know in the Raleigh, NC area needs help with back taxes related to the IRS or North Carolina Department of Revenue contact me so that I can help. I can be contacted by phone at (919) 792-8511 or you can email me directly using this link.
Lauren Massie
Lauren Massie, CPA, PLLC
8480 Honeycutt Road, Suite 200
Raleigh, NC 27615
(919) 792-8511
Lauren Massie, CPA, PLLC serves clients in North Carolina throughout the Greater Triangle Area including cities such as Raleigh, Wake Forest, Cary, Durham, Chapel Hill, Hillsborough, Youngsville, Franklinton, Morrisville, Garner, Knightdale, Zebulon, Angier, Clayton, Louisburg, Henderson and Wendell.