The Lothamer Tax Report

Did you miss another deadline?

Another tax season has come and gone.  Most people at this point are sitting back, anxiously awaiting their refund checks.  For others, this time of year is just a stressful reminder that they are now one more year delinquent with unfiled returns.

There are a variety of reasons why people stop filing.  Often time it’s because they know they’ll owe, and don’t have the money to pay.  Other times, something as simple as a missing document can lead someone not to file; then the following year they falsely believe they cannot file the current year without filing the prior year, so they get further behind.  Other folks simply find doing their taxes to be a headache, and put it off for that reason.

Whatever a person’s reason for not filing, it is important to know that regardless of whether you owe or get refunds, filing your back taxes (and filing on time going forward) can benefit you. If you haven’t filed because of something as simple as a missing document, you can get copies of wage & income transcripts at E-Tax Resolution.  If you think you may have refunds, it’s crucial to file your returns before those refunds expire (three years from the date the return was due).

If you owe, it is also beneficial to file on time, for several reasons. Obviously, by filing on time you will avoid late filing penalties. Also, the IRS will not work with you on any kind of payment arrangement or reduction of your tax bill unless you have your returns filed. Filing your returns prevents the IRS from filing them on your behalf and charging you more tax than what you’d owe (they do not take into account any deductions).  Last but not least, the 10-year collection period starts from the time the returns are filed, not when they were due.  So if you file late, you are extending the time period the IRS has to collect those taxes from you!

To get caught up with your unfiled taxes and get on the right track going forward, contact us for a free consultation.

April 21st, 2010 Posted by Lothamer | Uncategorized | no comments

Why should you file your back taxes?

Another April 15 has come and gone… Did you file your taxes on time?

 There are many reasons people get behind on their taxes.  Some anticipate a refund, and put off the chore of filing because they know they won’t owe.  While the IRS doesn’t penalize those getting refunds for filing late, there can still be consequences.

Many of our clients come to us with several years of back taxes unfiled.  It’s always sad when we file 6 or 7 years of back tax returns, and several thousand dollars of refunds are disallowed due to expiration.  Did you know that your right to claim a refund will expire three years from the due date of that tax return?  In other words, if you had a refund due to you for 2005, it expired on 4/15/09.  There are also expirations on the stimulus payments we receive.  Even if you usually owe, you want to make sure to file promptly, because stimulus payments will be credited against your balance, reducing your liability. 

If you haven’t filed because you’re missing documents, or are overwhelmed by the task of filing many years’ worth of back returns, we can assist you; just get in touch with us through the website or on the phone.

May 5th, 2009 Posted by Lothamer | Uncategorized | no comments