You Need to File a Tax Return!
In our February Tax Advisory and Article, we cover who should file professionally and who can go it alone in their tax returns. Basically, unless you make below $100,000 total and lead a very simple tax life, you should have a professional look over or create your tax return entirely. If you claim the Earned Income Tax Credit or EITC, it is well worth having a professional file for you. In so doing, the professional will perform due diligence and in the event you get audited you will have advanced protection on the issue.
So, what will happen if you do not file a tax return?
Quite simply, nothing good. If you have a return coming, you will not receive it. Potentially thousands of dollars will get washed away from your potential bank account. If you paid in, get the money back!
Like one large tax firm confirmed, there is a billion unclaimed dollars in tax returns. Get it back.
Next, if you owe money in, there is a penalty for not filing on top of penalties and interest. This accumulated and snowballs every year you do not file. I have had clients not file for 15 years and they had a gigantic snowball on their hands. It took nearly a decade to resolve the matter.
If the IRS does not get your tax return within 3 years, they will gladly do one for you. It is called a substitute for return or SFR and it will not be written in your favor, but rather the IRS’s.
If you paid in any money at all, you should file a return and see if you can get a return back. Failing to file only exaggerates the situation. If you haven’t filed for years, FILE!