What is a “tax year” and a “tax season,” and what is the difference?
The “tax year” in the United States refers to the twelve-month period to be used when determining your taxable income and any tax-deductible expenditures.
For most individual taxpayers, this runs from January 1 to December 31 for any given year. This is the year-long accounting period when you either pay or withhold taxes, keep your paper and digital records, and report your income and expenses.
On the other hand, the corresponding “tax season” refers to the period from January 1 until April 15 of any current year to prepare and electronically file your tax return. It ends on the due date for filing your tax return.
Extensions for filing your tax return are possible, which can give you an extra six months to prepare and file your tax return. This is why you sometimes see the tax season described as from January 1 until October 15.
So for the 2020 tax year, you would have from January 1, 2021 to April 15, 2021 to prepare and file your tax return on time. If you file for an extension, you would have from January 1, 2021 to October 15, 2021 to prepare and file your tax return on time.
Who needs to file taxes?
Each year, the IRS sets thresholds for minimum gross income. If you make less than this threshold, you don’t need to file a tax return unless there are special circumstances, and if you make more, you need to file your tax return.
For the 2020 tax year, this means that typically if you are a single person under 65 years old, you don’t need to file a tax return in 2021 if you made less than $12,000. Likewise, if you are the head of your household, you typically don’t need to file your tax return in 2021 if you made less than $18,650.
Is there a deadline to file prior year taxes?
If you expect a tax refund, you have three years from the original tax return deadline to file your prior year tax return and claim your refund. When you are eligible for a tax refund, there is no worry about penalties here.
If you owe taxes, there is no deadline to file a prior year tax return. However, you should be aware of late filing and late payment penalties from the IRS in this case.
In most instances, the IRS requires individuals to file their tax returns for the last six tax years, if required to file, to be considered squared away and in good standing with the IRS.
Can you still claim a refund when you file a prior year tax return?
Yes, it is possible to claim a refund for a prior year tax return if you are eligible. For most circumstances, you are eligible for a tax refund when you have paid more tax during a given tax year than you actually owe.
However, there is a deadline to claim a tax refund. You will need to make your claim for a refund within three years of the original deadline to file your tax return.
So you have until April 15, 2023 to claim a refund on your 2019 taxes. You have until April 15, 2022 to claim a refund on your 2018 taxes. And you had until May 17, 2021 to claim a refund on your 2017 taxes. (In 2021, the IRS automatically extended the last day to file your taxes to May 17.) Use our Tax Calculator to get a better idea of your return
After the deadline, any unclaimed amount of excess taxes paid goes to the U.S. Treasury.
If you believe you are owed a refund from the IRS for prior year tax, don’t wait any longer to get your back taxes in order. PriorTax can help you get your prior year tax taken care of today.
Why is it a good idea to file prior year taxes even if you cannot pay right now?
The IRS has both late filing and late payment penalties for when you did not file a tax return when you needed to do so. In addition, your outstanding prior year tax balance continues to accrue interest each month that you let it go unpaid.
However, in most cases it is a good idea to file your prior year taxes even if you are not in the position to pay all of what you owe right now. This is because the IRS’ late filing penalty will usually work out to be larger than their late payment penalty.
If you owe a significant amount to the IRS but cannot pay the full balance, you should still file your prior tax returns. You should then get in touch with the IRS to work out a payment plan so that you can pay it off according to what you can afford.
Filing your prior tax returns can stop the more considerable filing penalties, and with a payment plan in place, you can avoid more severe collection enforcement for your unpaid tax bill.
To get help getting your prior year tax returns in order, get in touch today. First, you pick the tax years you want to file. Then we help you to file your tax returns, answer any questions along the way, and review and prep the documents for you to download, print, sign, and mail off.
How do I obtain my prior tax returns?
There are times when you cannot obtain copies of your tax documents, like W-2 forms from employers or 1099 forms from your bank or for your other sources of income. In that case, you can request a free tax transcript from the IRS summarizing your return information. They are available for the current tax year and for the past three years.
However, there are also times when you need an actual copy of your prior tax returns rather than a summary. Then, in that case, you can request them from the IRS for a fee. They are available for the current tax year and for the past six years.