1. Who Needs To File? IRS Filing Requirements
2. Why File?
3. What If I Choose Not To File?
4. Common Filing Myths
5. Why File Now
1. The IRS has specific requirements as to who needs to file. If you do not make a certain amount of money in a given year you may be exempt from having a filing requirement. Consulting a tax professional to see if you have a filing requirement will ensure that you have an accurate understanding of your responsibilities as a taxpayer.
2. The penalties for non filers are severe. For every month that you remain unfiled the IRS can penalize you a percentage system, that does not go away when you do finally decide to file. There is no benefit to not filing.
3. If you choose not to file, and remain unfiled for an extended amount of time the Internal Revenue Sevice will ultimately file for you. This process of filing Substitute File Return or "SFR" can end up costing you a large amount of money. Once the IRS decides to file "SFR's" for you they will charge you the maximum possible tax, not taking into consideration any deductions you would have had if you had filed yourself. When the SFR is filed the IRS will now have a recorded number of what they believe you owe for that given year or years. This number is likely substantially higher then what you would have had if you had filed your own tax return, and in addition you will also have received non filing and non paying penalties making the sum that you owe even higher.
4. Filing Myths:
Myth #1 - "If I do not file, then I do not have to pay" - This statement is totally untrue. As referenced above, if you have a filing requirement and refuse to file a tax return, one will be filed for you charging you the maximum amount of tax. You will owe more after not filing, then after filing.
Myth #2 - "If i do not file, the IRS will not know how to find me" - The IRS has a record of your income not only from yourself but also from your employer. They are at liberty to levy your bank account, perform a wage garnishment on your payroll check, or even collect on your customer receivables in a business for taxes that they believe you owe.
Myth #2 - "If I do not file for long enough the tax debt will go away" - The IRS does have a Statute of Limitations on the collection of tax debt, but only once a return has been filed. Therefore if you do not file then you never "start the clock" on the collections Statute. Years later the IRS will catch up to you and at that point the penalties and interest will make that actual amount you owe double or even triple!
5. Why File Now? Solving the Problem - Getting your Tax Returns Filed
The only way to break the cycle of overpaying the IRS is to have your tax returns filed by a professional, who will know how to take every allowable deduction to save you the most on your yearly taxes. A qualified CPA will know how to handle returns that need to be filed from current or past years, and will be able to advise you in the case of missing receipts or information. It is never too late to get help with unfiled tax returns. Tax return help is essential in resolving any back taxes issue, and having them filed and becoming compliant will save you money in the long run.
Contact Community Tax Helpers to handle your tax return filing needs.