Many tax payers miss the April deadline each year. As a result, they have to file late taxes. Tax payers like yourself miss the filing deadline for numerous reasons. Perhaps you did not have the money. Maybe a family emergency occurred and the deadline slipped your mind until it was too late. You could be a new business owner and misunderstood W-4 allowances. Fortunately, you can still improve your financial status and get out of trouble with the IRS. In this post, you will learn how to file late taxes online and regain control.
Determine E-File Eligibility
To file late taxes digitally, you need to first determine whether you are eligible to file online. The IRS only accepts E-filing within three years. You can file your tax returns for the current tax year and two years before. More so, you can only file your returns electronically through a registered tax preparer. If you normally file your taxes yourself, you need to hire a tax preparer in order to file late taxes online.
Find Your Tax Documents
If you are eligible to file electronically, find your tax documents to file late taxes online. Collect the W-2s or 1099 forms of the years you have missed. You will need them to report your income. Tax payers who qualify for deductions and/or credits need to find additional documents. If you fall under this category, search for any documents that can prove your qualification. Only then can your tax preparer assist you in claiming them. These documents are crucial for filing your taxes late and regaining control.
Consider Your Payment Options
When filing your taxes late, consider all of your payment options. Upon missing the deadline, many tax payers become frantic and misunderstand their possibilities. You can pay your taxes using a credit card. All you have to do is take out a cash advance. If you do not wish to use your credit card, you can also apply for a bank loan. Some tax payers even take out a home equity loan to pay back taxes. Understand the options you have to refrain from owing more than you already do for filing late taxes.
Understand The Penalties
With the thought of owing more in mind, you also need to understand the penalties for filing your taxes late. Then, you can properly budget your money to repay the IRS what you owe. Each month that you are late, your late fee increases by 0.5%. While the maximum penalty fee is 25%, it can add up to a hefty fee. Many tax payers fall into financial downfall when they wait too long to pay off their taxes. However, certain fees are worth paying. For instance, liberty tax service fees might be worth the extra money. Determine when you can file your taxes and save your money according to the penalty structure. Then, you can regain control of your financial situation sooner than later.
Explain Why You Are Late
When you file late taxes, the IRS allows you to explain to them why you are late. If you have a significant reason for not filing your taxes on time, inform the IRS. When they consider an excuse reasonable, they do not charge failure-to-file or failure-to-pay fees. Therefore, honestly explaining yourself and your current situation could benefit your financial situation. You could be able to file late taxes without struggling financially.
Rather than losing control when you have to file late taxes, regain control and file online. To do so, first determine whether you are eligible for E-filing. If you are, collect your tax documents and give them to your tax preparer. Then, consider your payment options to repay what you owe immediately. Understand the penalties you will be facing to budget your money accordingly. Finally, explain to the IRS why you have to file late taxes. As an additional tip, keep yourself up-to-date with tax filing statistics. Now, you know how to file late taxes online and regain control.