I have a friend that hasn't filed taxes in like three years...She says she really hasnt worked but here and there. but regardless I would think they're are penalties for that..even if the government would initially owe you money you're actually giving it right back to them...right? I would like some input from others can you help me help my friend to understand the importance of this...thanks guys...
2007-09-27 05:48:05 · 3 answers · asked by stag4_2000 1 in Business & Finance ➔ Taxes ➔ United States
If she's gotten W-2's then the IRS will expect a tax return from her, if she's gotten 1099's the IRS will expect a tax return from her. If she hasn't worked but here and there, and does not have either W-2's or 1099's, more than likely she'll fall under the IRS radar screen. But, by not filing taxes, she could be missing out on refunds if she had W-2's and had federal or state withholding from her paycheck(s). If she had 1099's, she's expected to file a return, and the IRS will probably send her a letter at some point saying that she needs to file a return, or they will prepare one for her based on the information that they have received. If she's owed a refund, she has 3 years to file the return and collect the refund, if she owes the IRS there is no time limit to file the return. Penalties and interest would only apply if she owes the IRS, if they owe her there's no penalties or interest owed.
2007-09-27 05:56:32 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Yet one more question where the answer is "it depends".
Depending on her total income for those years, she might or might not be required to file a tax return. If all of her income was on W-2s, then in 2006 she wouldn't have been required to file unless her total income was $8450. The limits change a little every year, so would be a few hundred dollars less for the earlier years.
If she had money coming back, then technically she was still required to file if her income was over the limit, but the IRS probably won't worry about it, although she'd forfeit her refund by not filing. If she owed, then she's likely to get a letter from the IRS demanding payment of the additional taxes plus interest and penalties.
If her income was from self-employment, then she's required to file if it's more than $399 a year. She might not owe income tax on it, but would likely owe self-employment tax for social security and medicare.
2007-09-27 06:06:03 · answer #2 · answered by Judy 7 · 2⤊ 0⤋
She should file the returns. Most likely, if she is due refunds, not penalties would be assessed, but she also would not get any interest either. In most cases, penalties and interest are assessed on returns that owe money.
It's better to file and pay the little amounts than have that hanging over your head.
2007-09-27 05:57:51 · answer #3 · answered by extra_37 4 · 0⤊ 0⤋