What to Do If You Did Not File a Tax Return Last Year

When you are preparing to file your federal income tax return this year you may realize that you didn't file a tax return last year, or in previous years. There are different reasons taxpayers don't file a return. They may have thought they were not required to file a return; they may have meant to file a return but simply forgot; they may have overlooked a deduction or credit they could have claimed but didn't know about it at the time and therefore didn't file a return in order to claim it; they may have owed taxes and didn't file a return because they couldn't pay the taxes they owed; or this could be the first year they have to file.

If this is the first year you have to file a federal income tax return and you know you were not required to file last year, you have nothing to worry about. But if you did not file a return last year, or a previous year for one of the other reasons, you should first determine whether you were required to file, whether you can obtain a refund, or whether you owe taxes.

Why File a Prior Year Return?

It's important to file prior year returns to keep your record with the Internal Revenue Service (IRS) current and up-to-date. If you are due a refund, you must file a return to claim it, and if you owe taxes you will eventually have to pay them, and the longer you wait the more penalties and interest you will have to pay.

To Claim a Refund

If you find that you could have claimed a deduction or credit that would have entitled you to a refund if you had filed a return, you can still file and claim the refund. You can claim a refund for up to three years after the original due date for the return. But you must file a return in order to claim the refund. After three years you lose the right to claim the refund.

You should also keep in mind that if taxes were withheld from your pay last year or in a prior year and you were not required to file a tax return because your income was below the limits for filing a return, you may still be entitled to a refund if too much tax was withheld, or if you could claim the earned income credit.

When You Owe Taxes