Is your taxation filing due and you still haven’t started the process? You might get penalized expensively from the IRS along with heavy interest charges. Even if you are unable to pay taxes, you should file and pay the maximum; to avoid any future discrepancies and complete your data regarding taxation.
Online taxation services like TurboTax, and H&R block file back taxes for you. These online services help you to file back taxes or you can do it yourself as well, to avoid the failure-to-file penalty by the IRS. It can be up to 25 percent of your total tax bill. However, the IRS may exempt you from penalties or waive off the interest and offer you an installment plan to pay off your tax bill if you depict an effort to pay all the back taxes.
How to file the back taxes?
There are many ways to file your back taxes. For starters, you can download the forms from the IRS website and do the deed yourself. However, this might become a difficult task for people who are not very familiar with worksheets. For this, you will have to download the 1040 form from the IRS website first and then extract old worksheets from the IRS archives.
Another way to file back taxes is to get help from a professional. There are many tax professionals out in the market who will readily help you in filing your back taxes for a small amount fee, which ranges between $176 and $273 for the services.
Back taxes can also be filed by online tax filing services. H&R Block, TurboTax, and Jackson Hewitt are such names that are pioneers in this field, and thanks to their online services, there has been a reduction in the prices of the services due to the competition. Many online services have started offering their services for free to remain competitive.
One of these online platforms is H&R Block, which is also considered to be the top tier tax Software, H&R block simply makes the process of back taxes filing easy so that the taxes can be filed without any complication.
The H&R block software provides very clear and comprehensive instructions and explanations regarding tax filing and forms. The online platform has very easy and simplified navigation where you can save all of your progress to continue later.
Cost of H&R block file back taxes on your behalf:
It is very important to file the back taxes but it is a lengthy process along with being costly. As mentioned above, the IRS will charge heavy penalties for filing the taxes late. These penalties are normally five percent of the unpaid tax bill. If more than 60 days past the due date then you will be penalized for a minimum of $135 or 100 percent of the unpaid tax bill if the totaled amount is less than $135.
To avoid this kind of situation, it is very important to file extensions if by any means you know that you will not be able to file the back taxes in time. It will not give you more time to repay but it will at least eliminate the late-filing penalties.
If you are liable to receive a tax refund but also owe back taxes or have failed to file taxes on time then the IRS might confiscate your tax refund to fill up the late penalties forged on you.
Paying taxes is necessary but it becomes more painful with the penalties and interests added. In severe situations, the IRS might seize property or any other asset if you continue to keep the taxes unpaid. Therefore, it is very important to pay and file the taxes on time, and if by any means you haven’t been able to do so then at least file for back taxes as soon as possible to avoid the undue circumstances.
Documents required to file back taxes:
You need to have several documents to file the back taxes. First of all, you will need the 1040 form along with other worksheets and applicable schedules. An income statement is also required which needs to be filed under the form W-2 or form 1099, largely depending upon your mode of income i.e. an employee or a contractor. Also, these firms determine how much of your income is earned in the form of dividends, interest, or capital gains.
You will also be required to attach documents to support any kinds of tax exemptions, deductions.
Here are some of the basic documents required while filing for back taxes:
- Statements of contributions of IRA
- Mortgage documents
- Health care statements for the forms 1095-A, 1095-B, and 1095-C.
- Medical bills
- Student loan form 1098-E
- Attached documents regarding any sort of charitable contributions
- Details about any theft or other casualty loss
- Unreimbursed employee expense.
If you are lagging filing your back taxes, then don’t delay it further as you will have to pay more than you owe, including penalties and interest imposed by the IRS. Download the form from the IRS website or hire someone or an online service like H&R block to file back taxes for you and make your life easier.