Unfortunately, there is a limit to how old you can file a tax return to request refunds and tax credits. This IRS only allows you to apply for tax refunds and credits within three years of the original due date of the tax return. If you don't file your return within three years of the due date, you could end up not receiving a tax refund because you can no longer apply for lucrative tax credits or any additional withholding from your paycheck. You risk losing your refund if you don't file your return.
If you are due a refund for withholding or estimated taxes, you must file your return to claim it within 3 years of the due date of the return. The same rule applies to the right to apply for tax credits, such as the earned income credit. Your tax professional can prepare and file accurate back tax returns, set up a payment agreement with the IRS for you, and resolve any other issues related to your overdue returns. However, the IRS only allows you to apply for tax refunds and credits within three years of the original due date of the tax return.
If you use a tax preparer who pays fees and doesn't have the necessary filing fees, some tax preparers may offer you an early refund check (RAC). You can also choose to reach a settlement agreement or any type of income tax forgiveness that may apply to you. If you are having difficulty preparing your return, you may be eligible for help through the Voluntary Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs. Review the tax forms you collect for the year of the tax return you file to make sure you are using the correct forms.
If you don't file your return, you may have to pay an additional 5% of the unpaid taxes you were due for each month your tax return is delayed, up to a maximum of five months. The penalty for filing a return after the deadline is 5% of the taxes you owe per month for the first five months, that is, up to 25% of your tax bill. If you have these types of problems, the IRS can freeze your refund or apply the current year's refund to any tax bill you owe, just as the IRS would with any taxpayer who owes back taxes. Let's look at the reality of the situation when you have unfiled overdue tax returns and what exactly to do about it to prevent potential problems related to tax evasion from becoming a serious problem.
In these cases, filing a tax return could result in a tax refund that allows you to deposit money into your bank account. Self-employed people have to pay Social Security and Medicare taxes through their individual income tax returns.
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