If you haven’t filed your tax returns for a while, you may owe back taxes to the IRS. But on the other hand, you may have received money but simply forgot to file your taxes. Either way, if you haven’t filed a tax return for the previous year, it’s always a good idea to file now and get out of the rut.
Now, how do you go about filing a tax return for the prior year? You have a few options-
Option #1 Contact a CPA. You can always find a good CPA by looking in your yellow pages. Maybe you already did it first. Well, CPAs are expensive, especially when filing prior years, but this is the option to go for, especially if you’re totally lost, undocumented, or not confident enough. But if you’ve ever prepared a return yourself, you could easily prepare your previous year’s return. Even if you haven’t prepared a tax return yourself, if you’re reasonably confident in your abilities, you can try doing it yourself.
So how do you file a prior year tax return yourself?
Option #2: Use an online tax service
One of the most recent trends is preparing your taxes using services like turbotax or taxcut directly on their websites. But even better, prepare your tax returns for the previous year using online tax preparation sites. Only a few tax sellers specialize in filing old tax returns online.
Do not confuse the terms ‘online filing’ and ‘electronic filing’. E-filing is the IRS system for filing your taxes electronically. Filing online allows you to prepare your tax return using an IRS-approved provider’s website. Online filing providers also use the IRS filing system to submit your tax return to the IRS. However, ‘electronic filing’ is only available for current year tax returns; it is not available for prior year tax returns.
Using the online tax filing service is a 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.
Option #3: Use Old Tax Software
Perhaps the cheapest option of all is to use old tax software. You can use older titles from previous years to prepare your tax return. So, let’s say you find Turbotax 2002 or Turbotax 2003 or even Turbotax 2007, you can load it onto your computer and follow the steps to prepare your return. Most tax software has interview-style questions, just like a tax professional would. This makes it easy.
Once you follow the steps, you can print the tax return on the tax forms that will have the exact same format as the previous year’s tax return. That’s the beauty of it. You don’t have to go around trying to find tax forms from previous years—the forms are built right into your tax software. Using old tax software to prepare your taxes from prior years can save you a ton of money in tax preparation costs if you are reasonably confident in your abilities to use a computer.