what happens if you do not?

Question

file for your income taxes each year? I have not filed for the past 4 years but, i don't think i owe them any money if anything they probably gained money from me. what will happen to me if i don't file back income taxes?

Answer 1

Wow! Be careful whose answers you trust. There are a LOT of wrong answers up there. Here's the deal:


There is a possibility that you weren't making enough to be required to file at all. Also, if your parents were still claiming you as a dependent, there are separate requirements. However, it's worth it to you to file the returns even if you aren't required to file simply to get the money back that you paid in Federal Withholding.

Assuming by four years you mean you haven't filed a return since 2003, here is a breakdown of the filing requirements for each year for each situation based on the limited information you've given:


2003
-NOT a dependent on someone else's return-Gross income of $7,800
-Are a dependent-Either $750 of unearned income (dividends, interest), $4,750 of earned income (W-2 income), or your total income was more than the larger of 1)$800 or 2) your earned income (up to $4,500) plus $250.

As an additional note for 2003, if you are due a refund for this year, you've already given it up. Returns where you are claiming a refund are due within three years of the due date, and in this case, that was 04/15/07.

2004
-NOT a dependent on someone else's return-Gross income of $7,950
-Are a dependent-Either $800 of unearned income (dividends, interest), $4,850 of earned income (W-2 income), or your total income was more than the larger of 1)$800 or 2) your earned income (up to $4,600) plus $250.

2005-
-NOT a dependent on someone else's return-Gross income of $8,200
-Are a dependent-Either $800 of unearned income (dividends, interest), $5,000 of earned income (W-2 income), or your total income was more than the larger of 1)$800 or 2) your earned income (up to $4,750) plus $250.

2006-
-NOT a dependent on someone else's return-Gross income of $8,450
-Are a dependent-Either $850 of unearned income (dividends, interest), $5,150 of earned income (W-2 income), or your total income was more than the larger of 1)$800 or 2) your earned income (up to $4,850) plus $300.

If for any of the years above you were self-employed (received a 1099-MISC) you are required to file if you made more than $400 in self-employment income.

The amount listed as the filing requirement if you are not a dependent will be your automatic deductions (personal exemption plus standard deduction) for each year. Anything over that will be taxable income, assuming there are no other tax items you haven't mentioned.

If you need to file, you can access current and prior year forms at www.irs.gov. Go to the site, click "forms & publications", then choose whether to search by "forms & instructions" or previous years.

Since you're not too terribly late yet, you probably won't have too much in penalties and interest to worry about, although 2003 and 2004 might be a little high depending on what you owe. I would go ahead and get the information together and file your returns if you're required to as soon as possible. The longer you wait the more you will have in penalties and interest.

If you are to receive a refund you won't have penalties and interest, but if you owe, see if you can get someone to calculate penalties and interest on them before you send them in. Go ahead and send in the total due plus the penalties and interest. Some people say just wait, and the IRS will send you a letter notifying you of the additional amounts you owe, but why wait and let more P & I accrue, when you can go ahead and get it all out of the way, right?

I know this is a lot to read through, but in taxes there are rarely "simple" answers to simple questions. :-) I hope this helps, though!

Answer 2

Wow, what a load of BAD ADVICE! OK, and a couple of reasonably correct answers and a couple of GREAT answers, including this one.

The real answer is, "It depends." Maybe nothing at all will happen. Maybe you'll just lose out on some money that's due you. Or maybe you'll have a MASSIVE problem on your hands. It all comes down to numbers.

You are only REQUIRED to file if your income exceeds the filing requirement amount for your filing status as other posters have stated. If you make less than that amount you do not need to file an no action can or would be taken against you.

If you are required to file but have a refund coming and don't file, the IRS will usually ignore the fact that you didn't file since you don't actually owe any money. But you will have an open tax year that can be reviewed at ANY TIME in the future, even decades from now. And you'll forever lose the right to claim that refund 3 years from the filing deadline for the tax year in question so there's definitely a double incentive to file -- closing a tax year AND getting your money back.

If you owe and don't file, the IRS will usually come looking in a year or two if the information that they have indicates that you might owe. They'll usually ask nicely and give you time to file the missing return(s). If you don't respond, they'll file a return on your behalf using the data that they do have and send you a bill. Of course, they won't have all of your information so this won't be in your best interest as deductions, exemptions and credits that you might be entitled to won't be taken into consideration. They'll also add penalties for late filing as well as interest and penalties for late payment of tax. This will make your debt grow substantially.

If you don't owe anything, your only real penalty will be loss of the refunds due you. In your case, you've already lost the right to any refund from tax year 2003 or earlier if you haven't filed for those years. You still have time to play catch-up on 2004 through 2006. There won't be any penalties as long as you are even up with the IRS or are due a refund.

You say you "think" that you don't owe anything, but that means you don't know FOR SURE what your tax situation is. The only way to be SURE is to sit down and prepare the tax returns for the missing years. Then you'll KNOW where you stand with the IRS and can make an informed decision on what to do next. If you're below the filing requirement amount and only have a $10 refund coming, it might not be worth the time and hassle to file the return.

On the other hand, if you find that you actually OWE, you'll want to file as quickly as possible and enclose payment of the tax due in full. The IRS will then bill you for any penalties and interest due and give you a couple of weeks to pay that without adding any more to your debt.

Answer 3

There are circumstances where you are not required to file. Filing requirements are determined by age, filing status, and income. For instance, in 2006 a single person under age 65 could make up to $8,450 and not be required to file.

If you meet the filing requirements then you should file the taxes. If you owe them any taxes then you will be charged interest and penalties. But, if as you say, you think that they owe you then collect the refund and go out dinner.

Answer 4

If you do not file an income tax return in the US and have a refund due to you, you may file late WITHOUT PENALTY for up to three years after the return was initially due. If you fail to meet the three year deadline, you are still expected to file, but the IRS won't give you any refund due.

So why file for those years anyway? Because you will need to file those 'useless returns' in order to gain access to the refunds for the years which still qualify under the three year deadline.

If you OWE the IRS money for any of those years, be prepared to get a financial spanking in the woodshed.

Get going and claim the monies you deserve !!!

Answer 5

Publication 501 Exemptions, Standard Deductions and Filing Information covers specifically who must file a return.

Basically, if you are single and not claimed as a dependent, then you can earn up to $8,450 before being required to file a return. If you earned more than that in 2006 and did not file, the IRS won't come after you if you were due a refund, which would most likely be the case. If you earned more than that and owed the IRS money, they may not get to you this year, but you will get caught eventually. Also, you will get penalized.

If you are a dependent, then the circumstances are a little more complicated. If you have more than $850 in unearned income or you had more than $5,150 in earned income, then you must file. Self-employed individuals must file if they earned as little as $400.

The link to the publication I referenced is http://www.irs.gov/pub/irs-pdf/p501.pdf

Good luck,

Answer 6

You might not have made enough to be required to file - in that case, nothing will happen.

If you should have filed but didn't, it depends on whether you owe anything. If you do, you'll probably eventually get a bill from the IRS, with interest and penalties added on. If you didn't owe anything, and/or had a refund coming, you aren't likely to hear from them, you'll just lose your refund.

Answer 7

If you don't owe you have 7 years to file. You are basically just giving them your money though. If you don't owe you probably have a refund coming. You say you think you don't owe, you might want to do a 1040 ez just to be sure, if you haven't filed in 4 years you could have owed something and not know it.

Answer 8

You don't have to file if you don't owe any money or have any owed you.

Additional: My step-mother is a tax accountant and told me what I stated above. I haven't filed for income taxes for the past ten years because of this. I keep records of all of my income nonetheless in case they ever want to question me about it, but I can't do jailtime or be fined because I don't owe them anything nor do they owe me.

Answer 9

Pray to God consistently while trying, as God helps those who help themselves rather than those who are lazy. Lord Krisna said in Bhagavad Gita, we have to carry out our works and renounce the fruit of our action. So we must keep trying and find joy in doing our work, whether or not we get the desired result. We should not lose hope. Do your best and leave the rest to God,it will all come right some day or night.

Answer 10

Eventually you will get caught and some serious charges could be put against you. Tax evasion etc... The best thing to do is bite the bullet and file back taxes and get caught up.