Haven't filed in years? Here's how to catch up

What should you do first?

1. Create or log in to your IRS online account.
2. Download wage and income transcripts for each missing year. They show W-2s, 1099s and more reported under your number.
3. Pull bank statements and business records for those years.
4. Check for any letters, and if the IRS has filed a return for you.
5. Prepare the returns, one year at a time.

How far back do you have to go?

The IRS policy generally asks for the last six years, though it can require more in serious cases. There's no limit on assessing tax for a year you never filed, so those years stay open.

If you're due money, there's another clock. You generally have three years from the original due date to claim a refund. After that, it's gone. W-2 workers who skipped a filing year often leave real money behind.

What if the IRS filed for you?

It might have filed a substitute return using your income records. It won't include your deductions, credits or filing status, so the bill's often too high. Filing your own return usually replaces it, and it can reduce what you owe.

What about self-employed years?

You need a Schedule C for each year, built from your bank statements, which is basically catch-up bookkeeping. Your expenses reduce your tax, so it's worth doing properly instead of accepting what the transcript shows.

What if you can't pay it all?

File anyway. The failure-to-file penalty is far larger than the failure-to-pay penalty, as we explain here. You can then ask for a payment plan. You may also qualify for penalty relief.

What about state returns?

Most states with an income tax need returns for the same years, and they can have their own rules and penalties. Do them together.

If you're nervous, that's normal. Most people who come forward find it far less painful than years of worry. We prepare back-year returns for you to sign, and if your situation needs formal handling, we'll tell you.