Filing Returns: Your How-to Guide
Filing returns on-time every year is the easiest way to stay in the IRS' good graces, even if you don't have the money to pay your tax debt. It isn't against the law to not be able to pay the IRS; the IRS will never put you in jail for owing them. However, not filing returns is against the law. Below, we'll discuss your options for filing returns, as well as consequences for not filing.
Filing Returns with the IRS: Your OptionsThe IRS makes filing returns simpler by providing you with two options: e-filing and paper filing.
Filing Returns Online: e-FilingFiling returns online is fast becoming the preferred method among taxpayers, with more than 1 billion IRS 1040 forms having been e-filed since 1990. The IRS has even endorsed it as the safest, fastest, and easiest way for filing tax returns. Because there's less paperwork, e-filed tax returns get processed more quickly. There's also peace of mind, as e-filers receive an acknowledgement from the IRS that their tax return has been received or a detailed explanation of why it has been rejected, so that you can quickly correct and resubmit your return.
For those who are due refunds after filing returns online, you can receive your money in as few as 10 days. For those who owe, you have a "file now and pay later" option when filing returns online, and you can also set up an automatic withdrawal from your bank or pay by credit card.
Here are your options for filing returns online:
- e-file with Free File
- e-file with Free File Fillable Forms
- e-file with commercial tax software
- e-file through a paid tax preparer
It's important to note that filing returns from past years cannot be done through e-file. If you need to file returns from prior years, you will need to do so through paper filing.
Filing Returns by MailFiling returns by regular mail is slowly being phased out, as the IRS has been pushing for taxpayers to e-file. The IRS has even stopped mailing tax return forms to individuals and businesses, but you can still download all necessary documents at IRS.gov. Simply download the appropriate form(s) you need, fill them out, and send them via certified mail to the IRS.
Using the Where to File Paper Tax Returns page on the official IRS website, you can find the appropriate address for filing returns by regular mail, no matter what your situation:
- Filing returns for your clients, if you're a professional tax preparer
- Filing returns for yourself (individual taxpayers)
- Filing returns for businesses (corporations, partnerships, etc.)
- Filing returns for tax-exempt and government entities
Consequences of Not Filing ReturnsNot filing returns can lead to enormous tax debt, especially if your whole reason for not filing was to avoid one. You may think you're just one in a million to the government, but when the IRS is owed money, they will do anything to get it.
Failing to file your tax returns will get you:
- A Failure to File Penalty, adding five percent to your tax debt for every month that your tax return is late, capping at five months.
- A Failure to Pay Penalty, assuming that if you didn't file your taxes, you didn't pay your tax debt either. This adds half of a percent to your tax debt every month with no cap.
- Interest charges, added each day that your payment for your tax debt is late, also with no cap. The current interest rate is around four percent.
- A Substitute for Return, filed by the IRS for you. When the IRS files an SFR for you, you are given no deductions or credits, and you are taxed at the highest possible bracket, which can overstate your actual tax debt liability.
- Possible jail time. Not filing returns is illegal, and you could face federal prison.
What if you were actually due a refund for the tax year? Not filing returns and having the IRS submit a Substitute for Return for you could actually turn the tables: you could end up owing the IRS, plus penalties and interest. Don't risk paying the IRS money you don't owe!
Call now or fill out the form below for a free consultation if you need help filing returns from past years. We'll only connect you with a tax debt relief company holding at least a B rating with the Better Business Bureau. Avoid IRS back tax debt, and get help now filing returns!