Filing a Late Tax Return

Stack of tax forms with pencil and calculator
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If you haven't filed taxes for several years, or if you've never filed taxes, you can still file a late return. However, you may not receive any tax refunds since they generally expire after three years. If that's the case, focus instead on filing your late tax returns as soon as possible so you can get caught up and protect your refunds in the future.

Filing Your Taxes Late

Filing a late return can be stressful, and the stress can be worse if you have several years of tax returns to prepare instead of just one. But if you can spare a couple of weekends, you can catch up with the IRS.

The key to successfully filing a late tax return is finding all of your tax documents.

If you have your original W-2 forms, you're in great shape. But if you are missing any tax documents, the Internal Revenue Service can help you out. You can request a copy of your Wage and Income Transcript online; it will contain information from forms including W2s and 1099s. Online income transcripts are available for up to the last 10 years.

The wage and income transcript will not show any information related to state and local tax withholdings.

If the state you live in has an income tax, you should try to find your original W-2 forms or contact the state's revenue or taxation division to see if it has any information about your state withholding.

Claiming a Late Refund

In most instances, you have three years to claim a refund. The three-year period starts with the original filing deadline. After the three-year period is up, the IRS cannot send you a refund check. Your refund has expired, so to speak. For instance, a 2015 tax refund would have expired on April 15, 2019. (The original deadline was on April 15, 2016, plus three years.)

If you're due a refund, there's no penalty for filing the return late.

Penalties kick in only if you owe the IRS. If you owe, the IRS will assess two different penalties plus interest. There's a failure-to-file penalty (up to 5% per month that you are late, up to a maximum of 25%). Then there's the failure-to-pay penalty (generally 0.5% of your unpaid taxes, per month, up to 25%). And then there's interest on the taxes you didn't pay. The IRS sets the interest rate every quarter.

Tips for Catching up on Your Taxes

If you don't have your W-2 forms and you are using the transcript from the IRS instead, you will need it to fill in the same information on a substitute form called IRS Form 4852.

If you are using tax preparation software, you should add that form to your tax return and type in the relevant information. You also need to sign Form 4852, and you should attach a copy of the wage transcript. That way, the IRS will know that you have a reliable source for the numbers on your tax return.

You can usually find tax preparation software for older years through products such as H&R Block's TaxCut, TaxACT, and Intuit's TurboTax. Each software program has its pros and cons, but all three will suit you well for preparing your tax returns. You can also find prior-year federal tax forms at the IRS website.

If you're going to prepare the returns yourself, you'll want to use the same product for all the years you need to file. This way you can easily import your tax information from one year to another, saving you time and repetitive data entry.

You might also want to talk to a tax professional. Be sure to protect yourself first by asking some questions before hiring a tax accountant.

Getting out of Tax Debt

Once you've filed your return, you may find you owe the IRS money. If you can pay what you owe immediately, you'll avoid any further fees or penalties (although fees apply if you pay by credit card). But if you need a little more time, the IRS can work with you to arrive at a payment plan to help you get out of tax debt.

Such an installment plan will be based on whether you're caught up on your filings and how much you owe. If the IRS accepts, you'll still accrue penalties and interest until the balance is paid in full. Long-term payment plans will incur setup fees as well, which may be waived if certain conditions are met.

Article Sources

  1. Internal Revenue Service. "Don’t Lose Your Refund by Not Filing." Accessed April 15, 2020.

  2. Internal Revenue Service. "Transcript Types and Ways to Order Them." Accessed April 15, 2020.

  3. Internal Revenue Service. "Topic No. 159 How to Get a Transcript or Copy of Form W-2." Accessed April 15, 2020.

  4. Internal Revenue Service. "Important Facts about Filing Late and Paying Penalties." Accessed April 15, 2020.

  5. Internal Revenue Service. "Interest Rates Remain the Same for the First Quarter of 2020." Accessed April 15, 2020.

  6. Internal Revenue Service. "About Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs Insurance Contracts, Etc." Accessed April 15, 2020.

  7. Internal Revenue Service. "Additional Information on Payment Plans." Accessed April 15, 2020.