Taxes are complicated. This is a notion with which most everyone agrees. Because it can prove difficult to fully and correctly file tax returns, you — and many other California residents — may not know the best way to handle any issues that may arise with your particular tax situation. In fact, because of fears and anxieties, you may have avoided filing your taxes for a few years.
One of the main reasons individuals do not file their taxes relates to financial complications. A person may have filed a return, owed taxes, failed to pay those taxes in full and feared that another filing would result in more owed funds or repercussions for not having paid the previous deficits. While this can seem nerve-wracking, you may benefit more from filing than from avoiding your taxes.
Consequences of not filing
Though you may think that the government cannot take action against you if you do not give them the information in your tax forms, this is not the case. Your employers generally turn in information of their own to the Internal Revenue Service regarding the taxation of their employees, which means that your financial information is already on record.
Additionally, the IRS can file a return on your behalf based on more limited information than what you could have provided. As a result, you could still end up facing a tax bill. If this bill and other outstanding taxes go unpaid, you could face wage garnishment or tax liens.
Benefits of filing
Though you may fear owing more money to the IRS when filing a new tax return, you could find yourself pleasantly surprised to learn that you actually get a refund. Because so many unknowns exist with tax filing until the information is actually entered, you may face a more positive situation than expected. Therefore, even if you have skipped filing for years, you may wish to take the following steps to get your affairs in order:
- Organize financial records for all years that need filing
- Find necessary paperwork you may be missing
- Use the appropriate forms to file your taxes
- Turn in your forms to the IRS
The exact outcomes of your situation will vary depending on your specific circumstances, but nonetheless, addressing your tax issues may help you more than ignoring them.
If you feel uncertain as to how to deal with years of missed tax filings, you may wish to seek professional assistance. An attorney with knowledge regarding tax preparation and how to handle tax disputes may prove especially valuable to your particular situation.