There’s an old argument I hear from chronic procrastinators… “I do my best work at the last minute.” Maybe this applies to you when it comes to work projects, household chores, or that book you’ve been meaning to finish reading for… has it really been a year?
There is one time when procrastination is never a good idea and can actually cause you significant financial damage: filing your taxes. This is pretty much the financial equivalent of ignoring a leak in your roof – it might seem insignificant at first, but it sure won’t when you have rot in your Long Island house’s attic.
Plus, saving your filing until the last minute makes it far more likely you’ll forget altogether or just decide to not do it. Once that happens, and you didn’t file taxes, interest and penalties start accruing quickly, turning a manageable tax bill into a growing pile of debt.
Or, this could go the other way and you end up missing out on a tax refund — the IRS had a billion dollars in unclaimed refunds they were holding onto from 2020.
Beyond the immediate financial impact, though, not filing taxes can impact your long-term financial health.
For self-employed individuals, failing to report income can jeopardize future Social Security benefits. And when it comes to major financial milestones like buying a home or applying for student loans, lenders often require recent tax returns. An unfiled return can delay or even derail these plans.
The best thing to do right now is to get those past-due taxes paid. Procrastinating on those isn’t doing you any favors (even if you have a valid reason). If you didn’t file taxes this year, here’s how you can go about filing your past-due return.
1) Gather all relevant tax documents (W-2s, 1099s, receipts, etc). If you’re missing any documents, you can request a tax transcript from the IRS.
2) Use the right tax forms for the specific tax year. A complete list of prior year forms can be found on the IRS’s website here. If you’re looking for an easier-to-manage list for just 2022’s taxes, go here. For 2023, go here.
3) If you didn’t file taxes and can’t pay your tax debt in full, you may qualify for a payment plan. However, if the IRS catches you not filing or not paying, they’re less likely to negotiate with you about payment. So, work on initiating the conversation now by going here.
4) Get help from an experienced Long Island tax specialist you can trust. If you didn’t file taxes, the best route is to get help from someone whose job it is to know the compliance rules who speaks to the IRS regularly. It’s also helpful if that someone is also good at identifying potential deductions and credits so things are being filed correctly and as in your favor as possible.
This is our bread and butter here at Pierre-Louis & Associates CPA, P.C.. We’ve gone to bat for lots of people in the same situation. We can help represent you with the IRS too.
One last note: I should probably mention if you did file your past due return already but you still got a notice from the IRS, you’ll need to send a copy of the past due return to the address on the notice. It takes about 6 weeks for the IRS to process past-due returns (assuming it’s accurately completed).
If you’re at all feeling overwhelmed by the prospect of filing past-due taxes on your own (even after this step-by-step tutorial), we’re here for you. Let’s get your unfiled tax returns taken care of before year-end:
516-442-4579
To staying compliant,
Frantz Pierre-Louis