The information in this article is up to date for tax year 2023 (returns filed in 2024).
Filing taxes is your responsibility when you earn income. If you didn’t file or pay your bill, there was probably a reason why. However, you’ll want to get back on track to avoid penalties. Here’s what to expect when you file taxes from a previous year.
What if I didn’t file or pay my taxes last year?
If you did not file or pay taxes last year, you will need to file a prior year return.
You’ll report your income and expense information for the year you are filing, so you’ll need to have those records on hand. You can access your tax records on the IRS website if you are missing any documents. Requesting a Wage and Income Transcript will allow you to see data from tax documents the IRS receives, such as Forms W-2, 1098, 1099, and 5498.
If you are filing taxes for the past three years, you can prepare your taxes with TaxSlayer and print them to mail to the IRS. If you are filing a return over three years past due, you’ll need to download those tax forms from the IRS website, and then mail them to the IRS office in your state (the address can be found on your state return if you have a state filing requirement).
You can download the editable PDF for each year you require. For example, if you need to file for 2021, download Form 1040 for 2021. Tax laws change each year, so you will want your return to be calculated according to the tax laws for that year.
You will need to include any payment you owe when you submit your prior year’s return. You may have to pay a penalty since you did not file your taxes last year. There are both failure to file and failure to pay penalties. In this case, you will receive a notice of penalty and interest fees you will need to pay in addition to your taxes due.
Learn more: Filing Taxes for Previous Years
Note: If you are getting a refund, you likely will not be subject to a penalty for late filing. But you must file within three years after the return is due to collect your refund. Learn more about the Refund Statute Expiration Date here.
TaxSlayer allows you to prepare prior-year tax returns for up to three years after the return is due. Get started now!
What if I filed my taxes but didn’t pay my tax bill?
If you filed a tax return but didn’t pay your bill, you will be charged a fee for late payment. The failure-to-pay penalty is usually 0.5% of your tax bill per month that it was late. If you filed before the tax filing deadline, the fee will be lower than if you filed late. But beware of compounding interest on your unpaid tax bills.
To avoid this, you can enroll in an installment plan through the IRS to pay off your tax bill bit by bit. If you owe less than $50,000, this is a great option to tackle your tax bill.
Read also: What to Do If You Can’t Pay Your Tax Bill
Does the IRS know how much income I earned?
Yes. Every form you receive from your employer is also sent to the IRS. If you are self-employed, they will still know how much you earned from various 1099 forms you may receive. The IRS keeps accurate records, so file your taxes on time to avoid any penalties or late fees.
What if I miss the April 15th deadline?
File as soon as possible, even if you miss the original deadline.
You will immediately start to accumulate a failure-to-file penalty if you owe money toward your tax bill. This begins at 5% of your tax bill and caps off at 25% of your unpaid taxes.
On the other hand, if you are expecting a refund, you won’t be charged any fees. But you must file within three years of the original due date to claim your refund. The IRS will send you your refund once you file.
Learn more: What to Do if You Miss the Tax Filing Deadline
What if I am approved for an extension?
An extension gives you extra time to file your income tax return for that year. Typically, you will have until October 15 to submit your taxes to the IRS.
It’s important to note that an extension is only for filing your return. It does not give you extra time to pay your tax bill. Even if you’ve filed an extension, you must pay at least 90% of your balance by April 15. The failure to pay penalty is less than the failure to file one, but will still start at 0.5% of your tax bill. And you’ll still face the same compounding interest mentioned in the section above.
Read also: How Do I File a Tax Extension?
