Okay, so you missed the deadline to file taxes. Now you’re wondering why you should even bother with a late filing of federal taxes. If the IRS isn’t on your case about it by now, why put yourself through all the hassle?
The fact of the matter is that there are a ton of good reasons to get started on filing late tax returns. First of all, even if your return is late, the news may not be all bad. If you’re due a refund for withholding or estimated taxes paid, you could still get your money. The only way to claim the refund you’re entitled to is to file a late tax return.
“Is it too late to file my taxes?” you may be asking. Or, more specifically, “How late can I file taxes and still get my refund?” If you are due a refund, you have to claim it within 3 years or else you risk forfeiting it completely. The same goes for tax credits such as the Earned Income Credit (EIC). This means that you’ve got 3 years to file a late return and still get your refund. So if you haven’t filed your 2010, 2009, or 2008 taxes, you’ve still got time to file and get money back. The next deadline is April 15, 2012. If you fail to file 2008 taxes by then, you can say goodbye to any refund. The deadline for claiming a refund with a late return for 2009 is April 15, 2013, and so on.
Let’s say you’re self-employed. Then there’s another great reason for filing federal income tax late. If you don’t file, you won’t receive credit toward your Social Security requirement or disability benefits. Not filing means that no self-employment income is reported to the Social Security Administration.
If you were owed a refund from more than 3 years ago and you still haven’t filed, you may be thinking that there’s no longer any reason at all for you to bother filing late income taxes. You won’t get any money back from the IRS and they’re not charging you penalties on the un-filed return. But if you don’t file your own return, the IRS will file a substitute return for you based solely on information from other sources. This substitute return may erroneously have you responsible for taxes and the IRS will begin collecting procedures. In this case, in the interest of preventing further complications with the IRS, the best thing to do is file a return.
So in conclusion, late tax filing of federal taxes is nothing to be afraid of if you think you’re due a refund. In fact the only way to get your hands on that money is to file. Plus there’s no penalty. The best thing to do is to get started on your old returns right away.