How far back can you pay taxes?

Question

I need to know how far back you can pay taxes. I have an aunt that is older and she states she forgot to pay her taxes...she is now trying to oficially retire and she was told she has not paid any taxes for the past 10 years (she was paid in cash) and that she would have to work the 10 years to get SS and medicare benefits.

Can't she just pay the taxes for those 10 years?

Additional Details

1 minute ago
Update: Let's say she never made the minimal amount to file and now needs to recieve ss benefits because she is over 65, how can she swing that? Or as my original question said, how far back can you pay with no problems?

Answer 1

She can pay taxes as far back as she wants. Put she is going to in cure so much in penalties and interest. That she will probably be in debt for the rest of her life. She does not need to claim the income to collect Social Security if she is of retirement age. All she has to do is file for retirement benefits. People who have never worked out side the home collect Social Security. If she has never worked she will get a minimual amount. However if she is married or was married she can collect off of her husbands Benefits.

Answer 2

It doesn't matter how far back because if you owe the IRS they will take the money from you as far back as possible witha penalty, but if they owe you, then they are not in too much of a hurry to pay you a refund, and there is still some penalty but only by keeping some of the refund...like 10%. Now if she made less than the minimum to pay taxes then she should be ok but there will not be much in SS since it accounts for the work you have done over the years and tells you how much you are going to get. She might not get it at all if she never reported. She would need proof of what she was paid by getting a letter from the employer that paid her under the table and if they claimed that they paid her through their taxes then they could probably do that and then she will probably be audited. The the IRS website and check out the Facts or talk to a local CPA.

Answer 3

Making the minimum amount to file income tax has nothing to do with paying social security tax. If she was self-employed, then she should have been filing all along and paying the social security part of the taxes even if she owed no income tax. If she was not self-employed and was just being paid under the table, then both she and her employer were doing something illegal as they knew or should have known at the time - doesn't exactly sound like "forgot to pay".

She can pay back income taxes - that won't have any effect on eligibility for social security. Other responders are correct that if she is married, or was married for at least 10 years, she might be eligible to collect on the spouse's earnings.

Trying to cheat the system ends up biting back. Sorry.

Answer 4

If a taxpayer has filed tax returns in the past, on a "good faith" basis (meaning that you didn't knowingly and intentionally file a false or incorrect return), then the IRS has 3 years after the due date or the date the tax return was filed to come back with corrections (the latter of those two dates). Similarly, a taxpayer is provided this same 3-year period to try and file an amended return to try and obtain refunds.

However, this 3-year "statute of limitations" is not applicable if a taxpayer has never filed a return. Thus, if your aunt has not filed tax returns for 10 years the IRS has the right to audit those tax years for an indefinite period of time.

Normally, if a taxpayer receives a W-2 as documentation of income earned the taxpayer's employer will provide this W-2 to the IRS as well. Since the IRS has a record of income earned, they will know if the taxpayer should or should not have a filing requirement based on the amount of income earned. This, if your aunt has received W-2s with income that did not reach the filing threshhold, the IRS would have no basis for its comments since it would be very clear that she did not need to file.

However, think about it: 1) Your aunt was paid in cash, 2) The IRS never received a W-2 or any other record that would serve as proof of the amount of income she received, and 3) Your aunt never filed a tax return that reflected the amount of income she made (despite the fact that she would not have paid taxes).

It makes sense then that the IRS would have doubt as to her filing and tax payment status. Her best bet is to file returns for all those missing years, reflect on those returns that her income did not meet the filing threshhold (which changes year to year), and also have documentation of her income in the form of bank deposits, check stubs, etc. that would prove to the IRS that she indeed made the amount of income that she is now going to be reporting.

Assuming she has all this documentation, she should be able to file prior year returns and meet her filing requirements. Once you've clarified all of this with the IRS, you will want to obtain a certificate of good standing from them that she can provide to the social security agency that is administering her social benefits.

Good luck!

Answer 5

Two seperate issues involved.

1.) Paying income taxes. You are focused on this, but I think your real question is how to qualify your aunt for SS benefits retroactively. You can apy any and all back taxes, even beyond what might be legally required (i.e., what the IRS could clip you for if they audited you first).

2.) SS Benefits. If she didn't pay in, she doesn't get credit. SS benefit will be minimal. This is why so many people who think they are smart and gaming the system by getting paid as an independent contractor are actually screwing themselves over.

Good luck.

Answer 6

You're not going to like this. I feel your aunt has beat the system for all those years, and now wants to get the benefits the rest of us that play by the rules would get. What a slap in the face! If however your aunt was ever married, she could possibly claim survivors benefits from a either a deceased or divorced husband. And I'm perfectly fine with that.

Answer 7

I answered your other question. You can pay back. There is like $25 dollars a year fee they charge for every year that she hasn't paid .. It might even be less then that. Its really not a big deal. Call the IRS!!!!

Answer 8

She isn't eligible if they didn't take out SS deductions. The amount you get is based upon the amout you put in over time.

Answer 9

7 years I think

Answer 10

So, was she self-employed. Otherwise, someone should have been reporting her social security wages to the IRS.