Past Due Tax Returns | Back Taxes | Prior Year Tax Returns

Gamarra, CPA - Located in East Bay California in dowtown Concord, CA and Arlington Virginia

At GAMARRA, CPA we file late tax returns (prior year taxes).  Below are a list of frequently asked questions by our clients:

Question: Why should you file your prior year returns and get back on track?

Filing your back taxes will help you avoid interest and penalties. The sooner you file your return, the less you will pay in overall penalties and interest.  In cases where you cannot afford to pay the full amount, we can help you set up a monthly payment plan.

Question: What if I am due a refund for a tax return I did not file 3 or more years back?

You may be due a refund you never know until you prepare your taxes. If you are due a refund, you must claim it within 3 years of the return due date.

Question: What if I am self-employed and have not filed?

Filing your self-employed tax return ensures that your earnings for social security are reported and appropriately allocated to provide you with future benefits. If you do not file your taxes, then you will not receive credit toward social security retirement or disability benefits.

Question: I missed the deadline to file my tax returns, can I still file? 

Yes, you can always file after the deadline and may be subject to penalties depending on the circumstances.

Question: I have not filed my small business tax returns in over 5 years and I am worried that I will owe an amount that I can not afford? 

We handle complicated cases of this nature on a monthly basis. We can assist you to address your late filing needs including answering all your questions regarding late filings, penalties, and options to pay via an installment or offer in compromise. The best option is for you to call us and schedule a consultation. 

April 15 is the annual deadline for most people to file their federal income tax return and pay any taxes they owe. By law, the IRS may assess penalties to taxpayers for both failing to file a tax return and for failing to pay taxes they owe by the deadline.

Here are eight important points about penalties for filing or paying late.

  1. A failure-to-file penalty may apply if you did not file by the tax filing deadline. A failure-to-pay penalty may apply if you did not pay all of the taxes you owe by the tax filing deadline.
     
  2. The failure-to-file penalty is generally more than the failure-to-pay penalty. You should file your tax return on time each year, even if you’re not able to pay all the taxes you owe by the due date. You can reduce additional interest and penalties by paying as much as you can with your tax return. You should  explore other payment options such as getting a loan or making an installment agreement to make payments. The IRS will work with you.
     
  3. The penalty for filing late is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late. That penalty starts accruing the day after the tax filing due date and will not exceed 25 percent of your unpaid taxes.
     
  4. If you do not pay your taxes by the tax deadline, you normally will face a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes. That penalty applies for each month or part of a month after the due date and starts accruing the day after the tax-filing due date.
     
  5. If you timely requested an extension of time to file your individual income tax return and paid at least 90 percent of the taxes you owe with your request, you may not face a failure-to-pay penalty. However, you must pay any remaining balance by the extended due date.
     
  6. If both the 5 percent failure-to-file penalty and the ½ percent failure-to-pay penalties apply in any month, the maximum penalty that you’ll pay for both is 5 percent.
     
  7. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
     
  8. You will not have to pay a late-filing or late-payment penalty if you can show reasonable cause for not filing or paying on time.

If you have any questions or would like to schedule an appointment, please email us at gamarra@willgamarracpa.com.