How to File Back Taxes: 14 Steps (with Pictures) (2024)

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Co-authored byCassandra Lenfert, CPA, CFP®

Last Updated: September 9, 2022References

1. 1

   Understand the benefits of filing back taxes. There are many benefits to filing your back taxes as soon as possible, even if you are unable to pay the owed amounts in full. The benefits always greatly outweigh the costs.^[1]

   • Early filing and payment helps to limit interest charges, late fees, and penalties.
   • Any tax refunds will be lost if the return is not filed within 3 years of the return due date. This can lead to a substantial loss of money.
   • In addition, tax refunds are held by the IRS if they see that one or more tax returns are past due.
   • If you are self-employed, you will not receive credits toward Social Security Retirement or any disability benefits since the IRS requires reported income to award these credits.
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   Determine which years require a filing. Make a list of the tax years for which you have copies of filings or receipts of payments or refunds. This will help you narrow down the list of years you still need to file.

   • If you cannot determine which years you have filed taxes for and which years you have not, contact the Internal Revenue Service (IRS) directly and ask them.
   • Visit the IRS website (http://www.irs.gov/) or call directly at 1-866-681-4271 and ask to speak to a representative.
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   Look for old tax documents, such as W-2s, 1099s, or 1098s. You will need these documents to file. You can contact your old company for income information, but it's not a sure bet that they'll have the information on record.

   • A W-2 form is a form you receive from your employer at the end of each year that indicates your wage and salary information as well as how much tax you paid.
   • You will receive 1098 forms if you have paid tuition or paid interest on student loans or other types of loans.
   • You will receive 1099 forms for any other sources of income you have (for example, if you receive a pension or dividend income).
4. 4

   Contact the IRS at 1-866-681-4271 for any documents that you need but cannot otherwise locate. You can also use Form 4506-T (also known as Request for Transcript of Tax Return) to request relevant information on your W-2s, 1099s, and 1098s.

   • Form 4506-T is a useful tool if you need to receive previous information that you do not have access to. You can locate the form on the IRS website. Simply fill out the form and submit it online. Alternatively, print it, fill it out, and mail it to the address indicated.
   • You will not receive duplicates of any W-2s, 1099s, or 1098s, but you will receive information that's necessary for filing back taxes.
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   Plan ahead. It takes time to gather the necessary documents. If you request information using Form 4506-T, the IRS may take 45 days to get that information to you.

   • It also takes the IRS 6 weeks to process an accurately completed past-due tax return.^[2] If you are hoping to quickly access a refund, then you will need to start planning early.
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   Use the correct filing form. Once you have your available forms, filing your taxes involves inputting information from those forms onto something known as Form 1040, which is the main tax return form. Always use the correct form for the year you are filing. You can’t use this year’s form for taxes that you plan to file for a previous year's income.

   • You can also get the filing forms online at the IRS website, from an IRS office, or from your tax preparer, if you use one.

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   Do your own taxes to save money. If you do opt to do your own taxes, the most common method is to do your taxes electronically. In fact, 90% of Americans do their taxes electronically. There are a few basic ways to do this.^[3]

   • One way is to use the IRS Free-File service. If your income is $66,000 or less, Free File provides free tax software to both prepare and file your returns. If your income was more (or if you choose), you can also use Free File's online fillable forms to prepare and file your taxes.
   • For more information, go to https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free.
   • Both the software option and the fillable forms option simply involve following instructions, and inputting information when required.
   • Alternatively, use a free service like CreditKarma or purchase tax-filing software to help you prepare and file your return. Common programs include Turbotax, Taxslayer, H & R Block Deluxe, and TaxAct Deluxe. ^[4]
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   Use a tax professional if you need help filing. Since you are filing back taxes, it would be in your best interest to file accurate returns the first time. Getting help from a professional can help you avoid costly errors in your filing.

   • Employing a tax professional to prepare your back taxes may actually reduce the amount you're required to pay as well as facilitate a more equitable resolution with the IRS. They may be able to negotiate with the IRS for reductions or eliminations of tax and penalty. If you want to stay on the safe side, enlist the help of a tax professional.
   • A tax professional can include a storefront service like H&R Block, which is useful if your taxes are fairly simple. This person may have minimal training, however, so if your taxes are more complex, you may wish to look elsewhere.
   • A certified public accountant (CPA) is a state-licensed accountant. Not all CPAs specialize in income taxes, so make sure you ask about their particular expertise before deciding to work with a CPA.
   • A tax attorney is generally useful for very complex tax preparation and disputes, such as for a business or corporation.
   • An enrolled agent (EA) has been licensed by the federal government and can advise, represent, and prepare your tax return. The EA is required to take continuing education, so they will be familiar with the most up to date tax law and information. An EA differs from a CPA and other tax professionals in that they specialize in taxes and have unlimited representation rights before the IRS.
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   File your taxes with the IRS. If you are using Free File Fillable forms, free file software, or another form of software, these resources will e-file your return for you when you are done. If you are working with a tax professional, they can file the forms for you.

   • If you chose to manually complete the tax forms, simply mail the completed forms to the IRS. If the IRS contacted you requesting back taxes, use the address that they provided in their correspondence to you. Otherwise, use the address you would normally use to file your taxes. It can be found in the instructions and on the IRS website.
   • You can e-file your taxes for free up to 6 months after the filing deadline.^[5]
   • Filing will also start the statute of limitations on what the IRS can audit and what they can collect. The IRS generally has 3 years to audit your income for any given tax year^[6] and has 10 years to collect taxes if you fail to file, or possibly longer if fraud or tax evasion is alleged. Actually filing your back taxes will set this statute of limitations into motion, whereas failing to file will leave the statute in limbo, potentially never activating.
4. 4

   File your state back taxes if applicable. If your state requires that you file annual taxes, get caught up. While the penalties for not filing state taxes may not be as severe as federal penalties, state taxes should not be neglected.

   • Use any forms required by your specific state. Check with your state's Department of Revenue website or contact the Comptroller's office.
   • Remember to file taxes using forms that were current for the year(s) you owe taxes. Tax documents change every year, and filing with the wrong documents could result in a misleading application.

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   Understand the IRS's policy on late payment. If you end up owing money to the IRS and cannot pay it in full, you can request an additional 60-120 days from the IRS to pay your account in full.

   • To do this, call 800-829-1040 and no user fee will be charged.
   • If you are unable to pay in full within 60-120 days, you can request to work out a payment plan with the IRS to pay your balance in installments.
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   Apply to set up a repayment plan. If you owe money, you do not need to pay your full balance when you file.^[7] You can request a payment plan after you have filed your back taxes. Depending on what you owe, you may not even need to talk to an IRS representative.

   • If you owe $50,000 or less in combined taxes, penalties, and interest, then you can set up a payment plan by visiting the Online Payment Agreement website: http://www.irs.gov/Individuals/Online-Payment-Agreement-Application. You will receive immediate notification if your application is successful.
   • If you owe between $50,000 and $100,000, you can apply for a payment installment online if you can pay off the balance within 120 days.
   • Those who owe over $50,000 combined and cannot pay off their debt in 6 years must consult with the IRS about an acceptable plan.^[8]
   • Send in a partial payment when you file if you are planning to request a payment plan. Ask a tax professional or an IRS representative what is a reasonable amount to start.
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   Pay as much of the principal as you can. Interest will add to your total each month and, unlike other tax penalties which stop when the maximum is reached, will continue until you have paid your debt in full. For this reason, it's in your best interest to pay off a large chunk of the debt as soon as you can.

   • You may pay your taxes using a check or money order, electronic funds withdrawal, debit card, or credit card.^[9] Payment by debit or credit card carries processing fees.^[10]
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   Negotiate a reduction in penalties and fees. Once you have filed your back taxes, you can talk to the IRS about reducing the fees and penalties they may have assessed. You may qualify for First Time Penalty Abatement if it is the first time you have filed taxes late. Alternatively, you might be able to set up an Offer in Compromise, which is available for individuals the IRS deems no longer able to pay their tax debts.^[11]

   • Use the Offer in Compromise pre-qualifier on the IRS website to see if you qualify. If you qualify, fill out the most recent Form 656-B and either Form 433-A or 433-B. These forms are detailed and require that you list your assets, such as cash and investments, the current market value of any property and vehicles that you own, as well as business investments.
   • You also must list monthly expenses, including the amount spent on healthcare and health insurance, food, shelter, and utilities.^[12]
   • The IRS considers several factors in determining whether to reduce your debt: your income, expenses, ability to pay, and the value of your assets.^[13]
   • There is a $186 application fee.

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