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Filing previous years’ taxes: Step-by-step guide

6 min read

6 min read

Most people are required to file an IRS income tax return every year. In fact, the Internal Revenue Service (IRS) keeps a record of those who are required to file but don’t – and the IRS can take action against those with unfiled tax returns. For more significant cases, that means consequences and complications.

In some cases of failing to file back tax returns, the IRS charges penalties and interest, holds refunds, or files a return for you without any credits or most deductions you may be eligible to claim. (This is called a substitute for return or an SFR).

Needless to say, learning how to file previous years taxes is important. While it can be a daunting task to learn the ropes of filing prior year returns, it’s worth it to file.

Armed with the right guidance, you’ll quickly get back on your feet and feel the sweet confidence in knowing you are square with the IRS. Read on as we outline the ropes.

Can you file taxes from previous years?

If you didn’t file a federal income tax return for the last few years, you might wonder if you’re still responsible for filing those late returns. The answer is “yes” in most cases. But, if you didn’t meet the filing requirements, you don’t need to file a prior year’s tax return. 

Other reasons you’d need to file a previous year tax return

Other tax situations might require you to file prior year taxes, especially if you owe any special taxes like these:

  • Self-employment tax on income of $400 or above
  • Alternative minimum tax (AMT)
  • Additional tax on a qualified plan, including an IRA, or other tax-favored account (If you’re filing taxes only because of this tax, you can file IRS Form 5329 by itself)
  • Household employment taxes (If you file a return only because of this tax, you can file Schedule H by itself)
  • Social Security and Medicare tax on:
    • Tips you didn’t report to your employer
    • Wages you received from an employer who didn’t withhold these taxes
  • Recapture taxes, like the first-time homebuyer credit
  • Write-in taxes, including uncollected Social Security and Medicare or Railroad Retirement Tax on:
    • Tips reported to your employer
    • Group-term life insurance and additional tax on health savings account (HSA) distributions

You — or your spouse if Married Filing Jointly — received distributions from any of these:

  • HSA
  • Archer MSA
  • Medicare Advantage MSA distributions
  • Wages of $108.28 or more from a church or qualified organization that’s exempt from employer Social Security and Medicare taxes

You’ll also need to file taxes if you received an advance payment of the Premium Tax Credit.

For additional details, check out our post “Do I have to file taxes?”

Potential advantages of filing prior year taxes

Even if you aren’t required to file, you still might want to file a prior year tax return even if it’s late. This way, you can get a refund of any income tax withholding or refundable credits (going back up to three years).

If you have a business, you may also be able to have a net-operating-loss carryover if business deductions exceed income for the year. Additionally, if you owe self-employment tax for prior years and you file and pay, the IRS will report that amount paid to the Social Security Administration. If you don’t pay you won’t get credit for the unpaid amounts if you later file for Social Security benefits.

How to file previous years’ taxes

Many people find themselves in a situation where they need to file back taxes. The good news is it’s fairly easy to do. We’ll walk you through the steps!

1. Get the information needed to file the past-due return.

Start by requesting your wage and income transcripts from the IRS. The transcripts will help you identify important data points from Tax Forms W-2 and Tax Forms 1099 to use to file a previous year return. You can also order a transcript to see any estimated tax payments or credits posted to your account for that tax year. Learn how to research your IRS account.

  • Gather information about self-employment, investments, and any other income that isn’t on file with the IRS.
  • Review deductions and credits you qualify for.
  • File as soon as possible and plan to pay any taxes due in order to avoid any future enforcement actions (such as a substitute for return, levy, or lien).
  • Identify any special processing needed for your late-filed return (such as date-stamping or filing with an IRS compliance unit).
  • Determine how far back you should file. If you have several past-due returns to file, the IRS normally requires that you file returns for the current year and past six years in order to be considered compliant.

2. Complete the return and submit it to the appropriate IRS unit.

Complete your tax returns accurately. You can use H&R Block software back editions to get caught up on previous years’ returns. It’s best to double check your return against your IRS transcripts to ensure your full taxable income was reported to the IRS, and you included your total withholding/estimated tax payments as part of the calculation.

If you owe and can’t pay the full amount, consider requesting a payment arrangement.

Attach a penalty relief request to the return, if applicable. If you have only one past-due return to file, you could qualify for penalty relief on any failure to file and failure to pay penalties. If you have multiple returns to file, it’s more difficult to process the return and manage the resulting penalties and balances owed. For this reason, you might want to further investigate your penalty relief options in complex situations.

Mail your prior-year Form 1040 to the applicable address in the Form 1040 Instructions. Use a mail service that can certify and track the mail.

Make sure you get proof of filing in case the IRS doesn’t process your return or you experience related compliance activity (like a IRS collection notice, lien, levy, or unfiled return investigation).

3. Monitor return processing and other compliance activities.

To make sure the return was processed, contact the IRS. This is especially important If the IRS took prior actions on the unfiled return (such as filing a substitute for return).

Get help filing back tax returns

Filing back taxes may seem like a daunting task, but you don’t have to go it alone. Whether you choose to file on your own using H&R Block’s prior year software or talk to a tax professional at one of our tax offices nationwide, we can help you with late filing.

Rely on H&R Block for help to file a past-due return, navigate payment options, resolve any related compliance issues, and communicate with the IRS.

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