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Suggestions and Tips about Filing Back Taxes

Are you filing your taxes late? You are not alone; many people do not file their taxes on time. Here are a few tips to make the whole process rather smooth and relatively stress free. Filing a late tax return is not a whole lot different than filing a current year tax return with a few extra things to think about.

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The first thing you need to do is track down your missing tax documents. The IRS can help you with this by asking them to mail or fax you a "payer transcript" for the years that you have not filed. A payer transcript is a print out of information from your w-2 forms, 1099 forms, and other documents that were filed with the IRS. This information is very reliable but does not include any of your state tax information. You will need to contact your state tax agency to obtain information about your tax withholding.

When you have collected all of your missing tax documents, you are then ready to start preparing your tax returns. There are a few options for you to do this. You can download the forms from the IRS and state tax agency websites or purchase tax preparation software for the years that you are filing.

Next, you need to organize and prioritize your tax returns. Tax returns normally have a three year expiration date from the original due date to file a return and claim a tax refund. It is very important to file your 2004, 2005, 2006 tax returns as soon as possible. The last thing you want to do is lose your refund because your time limit expired.

When preparing your tax return you want to aim for a refund. With your late tax returns if there is a zero balance or a refund due to you, you are not charged any penalty charges. Penalties are calculated on the balance due from your return, so therefore you can not be charged a penalty if the IRS owes you a refund, therefore you should try and dig up old receipts to itemize as this will help you. You should also consider other itemized credits in your favor like getting married, divorced, dependent children, etc. You really want to show either a zero balance or a refund.

When are you are done with your tax return. You will want to review the penalties, failure to file on time, failure to pay on time, and interest on the amount. Since the interest rates change every quarter you can find all of the current information at www.irs.gov.

It is very important to pay your back taxes as soon as possible. If taxes are not paid and no effort is made to pay them the IRS can take more serious actions to collect on the taxes that where not paid such as levying bank accounts, wages or taking other assets and could be detrimental to your credit standing.