How Do I File Returns for Back Taxes?
It's easy to feel overwhelmed when you have years of back taxes you need to file, but we're here to help. Before you file your back taxes, learn how to gather old tax documents, which forms to complete, and how to minimize penalties and interest. If you're wondering how to file back taxes, take a look at this guide to get started.
The One Big Beautiful Bill that passed includes permanently extending tax cuts from the Tax Cuts and Jobs Act, including increasing the cap on the amount of state and local or sales tax and property tax (SALT) that you can deduct, makes cuts to energy credits passed under the Inflation Reduction Act, makes changes to taxes on tips and overtime for certain workers, reforms Medicaid, increases the Debt ceiling, and reforms Pell Grants and student loans. Updates to this article are in process. Check our One Big Beautiful Bill article for more information.
Key Takeaways
- You can file back taxes for any past year, but the IRS usually considers you in good standing if you have filed the last six years of tax returns.
- If you qualified for federal tax credits or refunds in the past but didn't file tax returns, you may be able to collect the money by filing back taxes. However, the IRS only allows you to claim refunds and tax credits within three years of the tax return's original due date.
- If you owed taxes in previous years but didn't file tax returns, you can stop some penalties and interest by filing back taxes, even if you are unable to pay the balance you owe.
- Filing back taxes and paying the associated taxes can help you qualify for Social Security retirement and disability benefits and Medicare benefits when you need them. Having tax returns for past years can also help with loan applications.
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Should you file back taxes?
Filing back tax returns could help you do one or more of the following:
- Claim a refund
One practical reason to file a back tax return is to see if the IRS owes you a tax refund. While many have federal income taxes withheld from their paychecks, sometimes too much money is withheld. In these cases, filing a tax return could result in a tax refund that puts money in your bank account.
- Stop late filing and payment penalties and interest
Filing a tax return on time is important to avoid or minimize penalties, even if you can't pay the balance you owe. If you don't file your return, you may have to pay an additional 5% of the unpaid tax you were required to report for each month your tax return is late, up to five months. Minimum penalty limits can also apply.
The IRS assesses another penalty for a failure to pay your taxes owed. If you do file on time, but you can't pay what you owe in full by the due date, you'll be charged an additional 0.5% of the amount of the tax not paid on time for each month or part of a month you are late. These fees will accrue until your balance is paid in full or the penalty reaches 25% of your tax, whichever comes first.
In addition to penalties, the IRS also charges interest on overdue taxes. Unlike penalties, interest does not stop accruing like the failure to file and failure to pay penalties.
- Have tax returns for loan applications
Certain types of loans, such as mortgages and business loans, may require you to have documentation of your income as part of the approval process. Filing your tax returns before you apply for a loan helps the process go smoother.
- Pay Social Security taxes to qualify for benefits
Self-employed individuals have to pay Social Security and Medicare taxes through their individual income tax returns. By filing a return and paying the associated taxes, you report your income so that you may qualify for Social Security retirement and disability benefits and Medicare benefits when you need them.
How late can you file back taxes?
The IRS usually only requires you to file the last six years of tax returns to be considered in good standing. That said, the IRS prefers that you file all back tax returns for years you have not yet filed. Is there a limit to how far back you can file back taxes?
Unfortunately, there is a limit on how far back you can file a tax return to claim tax refunds and tax credits. This IRS only allows you to claim refunds and tax credits within three years of the tax return's original due date.
TurboTax Tip:
You can request a transcript of the tax information the IRS has on file for you for any given year in the last 10 tax years by filing Form 4506-T. You will receive information found on forms such as W-2s, 1099s, and 1098s. You won’t receive information about deductions and credits you may qualify for, but the information you receive will help you file your back taxes.
What happens if you don’t file back taxes within three years?
If you don’t file your taxes within three years of the due date, you might end up missing out on a tax refund because you can no longer claim tax credits or any excess withholding from your paycheck.
How do you file tax returns for previous years?
Filing a tax return for a previous year isn't as hard as you may think, but it does require following these three steps.
- Gather information
The first step is gathering any information from the year you want to file a tax return for. Pull together your W-2s, 1099s, and information for any deductions or credits you may qualify for. You can refer to our tax prep checklist for more details on the forms you may need to file. Look at the tax forms you gather for the year of the tax return you're filing to make sure you use the right ones.
- Request tax documents from the IRS
Finding documents from previous years may be challenging for some. Thankfully, the IRS has a form you can fill out to request any tax information they have on file for you for a given year. Form 4506-T allows you to request a transcript of your tax return information, even if you haven't filed a tax return. You can request information from the last 10 tax years.
The IRS will send the information it has on record, including information found on forms such as W-2s, 1099s, and 1098s. It won't have information about deductions and credits you may qualify for, though, so you'll still need to do some work on your own.
- Complete and file your tax return
Once you have all the forms you need, be sure to use the tax forms from the year you're filing. For instance, you must use 2023 tax return forms to file a 2023 tax return. You can find these documents on the IRS website. Patience is important when filling out a tax return by hand.
Can you file tax returns for back taxes with TurboTax?
Yes, you can file tax returns from previous years using TurboTax.
- Select the year you want to file a return for to get started.
- Then, input your tax information and TurboTax will properly fill out the tax forms.
- You will have to print out and mail in your tax return for previous years as e-filing prior year returns is not an option through TurboTax.
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