Key Takeaways
- Gather as much information as you can about your income for the years you need to file, including W-2s, 1099s, and any income you received by selling capital assets.
- If your goal is to stop penalties and interest from accruing, you can always estimate your income and make a tax payment before receiving a copy of your 1099 or W-2.
- If you plan on itemizing deductions, you need to obtain whatever documentation you have that supports each deduction.
- Your past-due returns need to be filed using the tax forms and instructions applicable to that tax year.
Overview
The IRS requires you to file an annual tax return in various situations usually depending upon your income level. For example, if your income is greater than your Standard Deduction you are likely required to file a tax return. Also, if you have self-employment income of $400 or more then you are likely required to file a tax return. Many taxpayers fail to file a return even when required to do so. If you are one of them, you might be racking up interest and penalties on back taxes every month you are late. Your obligation to file these returns typically never goes away, but catching up may be easier than you think.
Step 1: Collect income information
Gather as much information as you can about your income for the years you need to file. You'll need your prior W-2s and 1099s for those years. If you are missing a W-2 or 1099-R and cannot obtain a copy from your employer, you can download and complete Form 4852 as a substitute for a missing W-2 or 1099-R.
If you had a gain from the sale of any capital assets in those years, such as stocks, you need to report this income as well. However, if your goal is to stop penalties and interest from accruing, you can always estimate your income and make a tax payment before receiving a copy of your 1099 or W-2 and filing your tax return.
Step 2: Determine deductions to reduce taxable income
You can typically reduce your tax bill with various deductions. Just because you are filing your return late doesn't mean you forfeit all of the deductions you could have taken. If you plan on itemizing deductions, you need to obtain whatever documentation you have that supports each deduction and complete Schedule A for the appropriate tax year.
If you don't have this, you can usually claim the Standard Deduction for each of those years. You can also reduce your tax by claiming deductions and credits for any dependents you were eligible to claim for the tax years. You need the names and Social Security numbers for each dependent you claim.
TurboTax Tip:
If you are missing a W-2 or 1099-R and cannot obtain a copy from your employer, you can download and complete Form 4852 as a substitute for a missing W-2.
Step 3: Obtain proper tax forms
Obtain the correct forms and instructions for the specific tax year. Your past-due returns need to be filed on the tax forms for the applicable year. You can typically access prior year tax forms on the IRS website or by contacting the IRS. Don't make the mistake of using current year tax forms or you may end up preparing the return again.
Step 4: Complete tax forms
Fill out the forms you need according to the instructions for those forms. Since the tax law changes from year to year, it's important that you use the instructions applicable for the applicable tax year. Aside from the confusion it will cause, using the wrong instructions may cause you to underpay or overpay the amount of tax you actually owe.
Step 5 : Electronically file or mail your tax return
File your tax returns and the required supporting documents by e-file or by mailing to the address listed in the instructions. Mailing your return to the wrong address may delay the time it takes the IRS to process it.
Tip
Make sure you make a copy of all of the documents that you send to the IRS. Documents are occasionally lost, and you may need a backup in case the IRS has questions or does not receive the tax return.
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