Prepare Your Prior Year Tax And Get On With Your Life
People get behind on preparing and filing their taxes for a lot of reasons. Tough times within their personal life, short on money to cover their taxes.
An associate of mine was experiencing a challenging divorce proceedings. It was not the best of times in his personal life believe me. And around rolls in April 15th – the deadline for preparing and filing his taxes. He even had trouble figuring out whether or not to file jointly or separately – not to mention the difficulties of conversing with his wife regarding taxes. And so the reality is filing a tax return is the last thing on his mind.
Remember you are not the only one on the planet who haven’t done their taxes.
Listed here are some points to remember should you be preparing to prepare a previous years unfiled tax return:
- You have to be current on your prior year’s taxes to receive a refund on a current year tax return. For instance to file a 2010 tax return, you should have filed all of the prior years taxes. If you feel you are going to get yourself a tax refund this coming year, you should definitely must prepare and file your prior years tax returns to make it current.
- You can file a prior year tax return for upto 3 years back and still get a refund. So lets say you did not file your 2008, 2009 and 2010 tax return, it is possible to still file them now and be eligible for a tax refund on the 2010 tax return.
- Prior year taxes can be filed at any time in the year. You do not really have to wait around for April 15th.
How can you prepare a prior year tax return on your own
Probably the most expensive method of doing your prior year taxes is by using an accountant. Not all accountants are similar when it come to having the work done. But one thing is nearly certain – preparing and filing a tax return from prior year is in fact far more expensive using an accountants as compared to preparing your current year taxes.
So why do professionals charge you more money to do your prior year taxes? Tax rates, brackets, exemptions and taxcredits changes from year to year. So effectively your tax preparer has to go back to back a few years to figure out each one of these things.
Is it possible prepare prior year taxes on your own ?
Sure! To do this manually you will have to first step is to hunt down the previous years tax forms. For instance to file a 2008 tax return you would have to file it using tax form from 2008.
The forms are not that easy to find particularly when you go back a couple of years. To search for the forms even on the IRS site is difficult. Not only you’ll need the actual tax forms, you also need the instructions that go with it. Next comes the hard task of getting your paperwork in order lastly the hard part – the number crunching.
Can there be a simpler method ?
Of course!
A few tax websites offer online preparation of prior year taxes. These websites guide you through an interview process. For those who have used one of the major tax sites you will probably be familiar with the guided interview process. The software program walks you through the steps of capturing your personal and tax info. If you don’t have a prior year W2, there are specific steps you can follow to obtain one.
Here is a list of tax sites that specialize in prior year tax preparation
