If you have have not filed your tax returns for a while you might owe the IRS back taxes. But on the other hand, you actually might have had money coming to you but you just neglected to file your taxes. Either way if you have not filed a prior year tax return, it is always a good idea to file it now and get out of the rut.
Now how do you go about filing a prior year tax return? You have a few choices-
Choice #1 Contact a CPA. You can always find a good CPA if you look up your yellow pages. Maybe you already did that first. Well CPAs are expensive, especially when you file a prior years return – but this is the option to pursue especially if you are totally lost, do not have documents or are not confident enough. But if you have ever self-prepared a return ever you could easily prepare your prior year return. Even if you have not prepared a tax return yourself, if you are reasonably confident in your abilities, you can try doing this yourself.
So how do you file a prior year tax return yourself?
Choice #2- Use An Online Tax Service
One of the newest trends is to prepare your tax return using services like turbotax or taxcut directly on their websites. But even better, to do your prepare your prior year tax returns using online tax preparation sites. Only a few tax vendors specialize in filing old tax returns online.
Do not confuse between the terms ‘online filing’ and ‘e-filing’. E-filing is the IRS system to file your taxes electronically. Online filing allows you to prepare your tax using a website from an irs approved vendor. Online filing vendors also makes use of the IRS’ efile system to submit your tax return to the IRS. However, ‘e-filing’ is available only for the current years tax returns – it is not available for prior year tax returns.
Using online tax filing service is stress free and cost effective way to prepare your prior year tax returns There is no software to install so even someone with limited computer experience can do it.
Choice #3- Use Old Tax Software
Perhaps the cheapest option of all is to use old tax software. You can use older titles from prior years to prepare your tax return. So lets say, you find Turbotax 2002 or Turbotax from 2003 or even Turbotax 2007, you can load this up on your computer and walk through the steps to prepare your return. Most tax software have interview style questions – just like a tax professional would ask. This makes it easy.
Once you walk through the steps, you can print out the tax return on the tax forms that will be the exact same format as the tax return from the prior year. That is the beauty of this. You do not have to run around trying to find tax forms from prior years – the forms are built into the tax software. Using Old tax software to prepare your prior years tax return can save you a ton on money in tax preparation costs if you are reasonably confident in your abilities to use a computer.