First and foremost…take a deep breath.
Now that the anxiety has passed, it’s time to use that clear mind and get to work! The hardest part about getting back on the bandwagon after not filing your taxes, for whatever reason, is to not get bogged down and go down a rabbit hole; by that we mean freaking out and feeling overloaded. It can be overwhelming trying to get everything together that you’d need to file your taxes, so the first step is to get a checklist of the documents you need (see our website for one) and then to gather what you can!
Things like W2s or 1099s, proof of insurance, mortgage interest statements and personal property taxes are all documents you want to keep either in a filing system that you have or even a shoebox. But if you have any other documents that you think may be important, keep those in your collection of documents, as well, because it’s always better to have too much than not enough. For instance, some of our clients keep any and all documents that have the words ‘Tax Document’ on it, even if it’s just update letters from the IRS; not a bad rule of thumb.
So let’s say it’s January and you haven’t filed since 2014 and know you won’t make the deadline of April 15th this year. First thing to do, is to file for an extension that then gives you until October. In order to file your personal return in October, irs.gov has the form (4868) you can fill out and snail mail in or file electronically. In the meantime, work on getting all your documents together for each year until the current year. Keep in mind that if you have a refund that’s due to you from 2014, you only have three years of its due date to claim the refund before it’s basically considered null and void.
However, the downfall to not filing is that penalties and interest can add up over the years, which, in general is no fun, especially if you owe taxes. Keep this in mind though, even if you miss deadlines for filing on time, it’s always good to file with the IRS, even if it’s late and you haven’t filed for an extension. The IRS won’t turn away your return and if you file within the time frame, you’ll still get your refund.
Now if you do owe the IRS, again…take a deep breath, and repeat until the anxiety goes away again. The IRS just needs to know that they’re going to get their money and that you’re good on making payments; keep in mind they do payment plans. The important thing to note here is that whatever amount you decide to pay them is an amount you know you can make every month without failure. So if all you can do is $30 each month, the IRS will usually work with you, but you may have to prove that is all you can pay.
Taxes can seem daunting at times, even if you’re up-to-date, but even more so if it’s been a while since you filed last. The most common thing we see if this is the case, is people feeling like they’re never going to get out from the dark path of fear because they don’t even know where to start. Look over our checklist to help get you going, remember to breathe, and give us a call or set up a meeting if you need help staying on track or aren’t sure about what documents you need to have. We’re more than happy to help!