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I am a self employed musician in Texas and I have not filed 2005-2008 taxes. I make about 5,ooo in contracted gigs that are 1099 reported to the IRS but the rest of my misc income is lessons, etc. I have will owe small amounts for a couple of the years and refunds on others (from misc w2s) all in all depending on the penalties I should come out about even. I have not been contacted by the IRS about this and filed in all previous years. I am mostly supported by my domestic partner (unmarried) and just don't make that much. Question: Do I begin with 2005 and file the taxes in order? A friend told me the most recent were more important and that IRS told him they didn't care about anything more than three years back. It that true?
Country/State/Province of question: Texas, 78666
HelloCustomer In the case where a taxpayer has not filed a return in a number of years, the IRS will generally require that the person file returns for the previous 6 years. In the majority of cases, that will be the extent of how far a person needs to go back. So in your particular case, you should plan on filing returns for 2005 through 2008, or a total of 4 returns, in order to bring your account up to current status. There is a statute of limitations on the time that you have to claim a refund, and that is 3 years from the date that the return was originally due. So if you had a refund coming for 2005, (which had a due date of 4/15/06), you would no longer be eligible to receive a refund for that particular year. But you should still file the return. It would really be best if you go ahead and complete the tax forms for all 4 years that you have missed and file them together. That way you will be able to determine your overall tax liablity for all years involved. Once you complete and file the returns, you will then receive a notice from the IRS to let you know what interest and penalties may also be due in addition to any taxes owed. In years where you had no additional tax liability, then of course no interest or penalties would apply. If this was helpful please press the Accept button. Thank youCustomer and let me know if you have more questions. I am happy to help you with whatever I can.
Accountant
25+ years tax consulting. Specializing in returns for US citizens living abroad
Do I pay what I think I owe at the time I file all 4 and then wait for them to get back to me about the penalties?
Hello viola, You should send in payment for what you owe when you file the returns. If it ends up being an amount that you cannot afford to pay all at one time, then you will need to file an application for an installment plan to make arrangements to pay the tax bill over a period of time. Once the IRS notifies you of any additional interest or penalties, you can then pay that amount separately, or again, you may set up a payment plan if it is needed. If this was helpful please press the Accept button. Positive feedback is also appreciated. Thank you viola, and let me know if you have more questions.