Real Questions from our Reddit Ask Me Anything – Filing Taxes
Editor’s Note: In mid-January, we hosted a Reddit Ask Me Anything (AMA) with Andy, a director in The Tax Institute at H&R Block. Reddit is a community-based website with over a million topic forums and AMAs are places for people to ask anything to an expert on a topic. Andy answered some of the Internet’s most burning tax questions, ranging from tax reform to student loans, marriage, freelance work, and more.
Ever wondered what happens when you don’t file your taxes or forget about the filing deadline? What should you consider when choosing your method to file your taxes? Andy answered these questions and more below.
Late and Delinquent Taxes
Q: I have an unclaimed tax return (about $1000) from 2015. How do I go about claiming it?
A: Sounds like you haven’t filed for 2015 yet. In that case, you need to file a 2015 return to get your ~$1,000 refund. If you already filed and need to fix the return, you will file an amended return (Form 1040X). In either case, there’s a need for speed! You need to file a 2015 return by April 15th to still be eligible to claim the refund.
Q: How long do I have to claim my refund from a previous year if my return was rejected?
A: You must claim your refund within three years of the due date of the year in question. If your return was rejected, any subsequent filing will be considered your original return as the IRS did not accept the return you filed originally.
Q: Due to a number of issues including low income, I haven’t filed taxes in a number of years. How can I file again without creating problems for myself? Is there an amnesty program?
A: First, make sure you actually had a filing requirement for each year. For any year that you should have filed, you need to file a return. You may even be due a refund. If so, you can claim a refund for only the last three years (2015 and later years). If you owe, there are options to pay your taxes over an extended period of time or, in some cases, even settle the liability for less than what you owe. Bottom line – things aren’t going to get better by waiting.
Q: What happens if I miss the filing deadline?
A: The IRS doesn’t take kindly to tardiness. If you miss the filing deadline and you have a balance due, you may be subject to some penalties. If you think you’re not going to file before the deadline, the IRS is always willing to give you a six-month extension. But remember, you must request the extension from the IRS and an extension of time to file is not an extension of time to pay. If you owe the IRS, submit payment with that extension request.
Methods for Filing
Q: Why should your average Joe hire an expert from a tax service rather than a tax program (ex. TurboTax)?
A: Personal preference. It really comes down to your comfort level and confidence in doing your return. Some people feel comfortable tackling it themselves. Other people have more complex situations or less confidence and they seek help. Now there are a lot of options that combine DIY filing with professional assistance, like our Tax Pro Review at H&R Block, where you do it yourself and we check it for you. It’s really up to you.
Requirements for Filing
Q: I made $1,185 last year and payroll taxes were taken out. Do I even need to file?
A: As long as you’re not using the married filing separate filing status, you’re not required to file.
Q: If I were to rent out a bedroom in my home, would I by law be required to claim that as income?
A: Unfortunately, rent is rent and Uncle Sam’s going to want his cut. Whether a room in your home, a vacation cabin, or an investment property – if you collect rent, you’ve got to claim it as taxable income.
One saving grace – There’s a special rule that if you rent it for fewer than 15 days, you don’t have to report any of the rental income. If you rented for 15 days or more, the income is taxable, and you need to report it.