Contact Us:newpawsibilities2@gmail.com
Finace

Why Address Unfiled Tax Returns Now?

  • September 23, 2024
  • 7 min read
Why Address Unfiled Tax Returns Now?

Unfiled tax returns may have substantial financial and, more importantly, legal consequences if left unaddressed. Perhaps you forgot, couldn’t afford to pay your tax bill, or just couldn’t figure it out in light of complicated tax laws. Whatever the reason, it is now time to take action. That said, this article takes a look at common reasons unfiled tax returns occur, the consequences of not filing, how to handle the situation, and how Austin CPA firms or professional tax preparation services can help.

1. Common Reasons for Unfiled Tax Returns

Most of us fall behind in filing our taxes for whatever reasons. Some of the most common ones include:

Overwhelm or Procrastination: Filing taxes for some can be an overwhelming task, especially to the people who have complicated finances. People tend to procrastinate on filing because sometimes they simply don’t know where to start, or they could be really nervous about the outcome.

Financial Burden: Incapable of paying what you owe, you may delay and deny in hope that the problem will just disappear. This unfortunately only gets worse.

Life Events: Any major life change such as divorce, illness, death of a member of the family, or moving to another location might throw one off track regarding tax obligations.

Lack of Documentation: In situations where key financial documents/records have been lost, it can be complicated to file accurately, hence affecting the ability to file on time.

Whatever might be the reason for such delays, one needs to understand that the more the problem is being avoided, the worse it would turn out in the long run.

2. Consequences of Not Filing Tax Returns

One does face some serious financial and legal consequences of not being able to file a tax return. Here’s what happens if one fails to submit:

Interest and Penalties: The IRS hits you with some serious penalties both for failing to file on time and failing to pay on time. These fines accrue over time, adding even more to the amount you will owe when you do file. Furthermore, interest is charged on the unpaid balance, building upon delay.

Refund Loss: You will lose your refund if you’re due a refund from your taxes, and you only have three years from the date when the original return was due to file a claim for refund. If you don’t file within that time frame, you will lose your refund.

Aggressive Collection Methods: You also open the door to some pretty aggressive collection methods from the IRS, including wage garnishment, bank levies, or liens on property. These can be events that really affect your finances substantially.

Credit Score Damage: The failure to pay taxes affects credit scores in negative ways, making any future loans or credit difficult to obtain.

With these kinds of consequences, it is not hard to understand how delaying unfiled tax returns can certainly hurt one’s future financially.

3. How to Address Unfiled Tax Returns

The good news is that it is never too late if you have unfiled tax returns. Here are some steps you can take in order to deal with your problem:

Organize Your Records: Collect all income documents, W-2s, 1099s, expense receipts, and any other applicable records for the years you haven’t filed.

Hire a Tax Professional: Keep a watch out for a CPA firm or any tax preparation service that will assist you in unfiled tax returns. They are the people who will guide you step by step and fill out all the forms that are to be filled out for filing.

File Multiple Years at Once: Even if you owe back taxes over a few years, one of these pros will help you file all of them at the same time and keep you compliant with the IRS guidelines.

Negotiate with the IRS: Sometimes, you will owe back taxes. A professional can negotiate on your behalf with the IRS, and with the case and condition in view, may reduce the amount as per the various payment plans or settlement options available.

You get to face the problem head-on, and it stops the penalties from continuing to build up. You get back in control of your finances.

4. How Austin CPA Firms Can Help

If you happen to be in Texas, you can get special unfiled tax returns help from local Austin CPA firms. How so?

Expert Knowledge: Their knowledge of both federal and state tax laws makes them quite capable of guiding someone through the technical world of taxes.

Precise Filing: CPAs will ensure your statements of tax return are accurate so as not to be in error or discrepancy that invites audits or penalties. With experience in CPA, you are, therefore, able to negotiate any type of communication with the IRS, especially if you owe back taxes. They can negotiate an agreed best payment plan, a settlement, or even abatement of penalty.

In other words, Austin CPA firms will make the process much easier to deal with unfiled tax returns and explain it to you through the convoluted tax system.

5. The Advantages of Professional Tax Preparation

The advantages of using a professional tax preparation service are immense in dealing with unfiled tax returns:

Experience: Tax pros train to understand the finer points of tax law and ways of minimizing your tax liability. They can also save you from some expensive mistakes that will lead to audits and penalties eventually.

Time-Saving: The time involved in filing your tax is so precious it would have been spent on other matters. Engaging the service of an expert frees you from such tasks and allows you to attend to other affairs that are of urgency.

Compliance with the IRS: With a pro, you know your filings are in total accord with all IRS regulations, reducing further risks of other legal complications.

6. What Does It Mean to Keep Ignoring Unfiled Tax Returns?

If you keep ignoring your unfiled tax returns, the consequences keep getting worse:

Increased Penalties: The IRS charges a failure-to-file and a failure-to-pay penalty. These mount up fast.

IRS Enforcement Actions: If one’s debt is huge, he or she could be exposed to serious IRS enforcement actions such as wage garnishment, a bank account levy, and may even attach properties in one’s name.

Possible Legal Consequences: If there are extreme cases that involve a person who willfully evades taxes, that person can be taken to criminal court with heavy fines or imprisonment.

Not filing unfiled tax returns will jeopardize one’s financial security and reputation; hence, these need to be addressed at the earliest opportunity.

7. Avoid Headaches in the Future with Tax Preparation Services

Once you have cleared up your unfiled tax returns, now it is time to prevent the same headaches from occurring in the future. Professional tax preparation services will keep you on top of your future tax obligations. Here is how:

Regular Filing: The tax professional will ensure your taxes are filed correctly and on time each and every year.

Proactive Tax Planning: Tax preparation services can afford to go an extra step in guiding you on how best you can reduce future tax liabilities with strategic tax planning.

Record Keeping: There are professionals who will help you keep appropriate records and books throughout the year, so that when it is time to file your taxes, you are ready.

Because of that, professional engagement entails not being caught in stress and other penalties resulting from failure to submit returns of income.

Conclusion

Unfiled tax returns help is essential for financial stability and avoiding penalties, interest, and legal actions from the Internal Revenue Service. Austin CPA firms and professional tax preparation services can make this problem go away faster and more efficiently than you may think. Do not wait until it’s too late. With a professional on hand, you can ensure this year’s tax season is hassle-free and that you plan for the elimination of future stressors that could impede good financial health.

Read More: Best Stock Trading Courses for Beginners

 

About Author

Jinal Shah