The IRS only allows a certain amount of time to claim refunds you’re due from old tax returns. If you have late returns and are expecting refunds, it is best to file them as soon as possible to avoid missing out on cash the IRS owes you. When a late return shows you are due a refund, the IRS does not penalize you for filing late, so there’s no need to worry about losing any of your refund to late-filing fees.
Wage and Income Information
When filing late tax returns, one of the most important things you must do is include all the income you’re required to report. From year to year, it’s easy to misplace documents you need to complete your return. The IRS can provide you with free copies of your wage and income information for each late year you need to file -- all you have to do is order the information from the IRS. These transcripts show information from all third parties who reported income for you, such as W-2 and 1099 payers, plus payments you made for certain things like mortgage and student loan interest. If you sold stock or received disbursements from retirement plans, that information is also included. Essentially, all the income the IRS expects to see on your return for a particular year is included on the transcript. You can request this information by calling the IRS at 1-800-829-1040, or by submitting IRS form 4506-T.
After you receive your wage and income information, you’ll need to decide if other information is needed to prepare your return. For example, if you receive 1099-MISC non-employee compensation, you may be considered self-employed and entitled to deduct expenses you incurred to earn that type of money. Gather receipts for that year that prove your deductions, or obtain copies of cancelled checks, bank or credit card statements that prove your deductions if actual receipts are unobtainable. For any item that is reported differently than what the IRS shows on your wage and income transcripts, you’ll want to keep copies of the documents and records used to arrive at your calculations.
The IRS only allows you to claim refunds and most tax credits within three years of the date the return was originally due. So, if your 2010 tax return is late, you have until April 15, 2014 to file the return and get a refund. This is because your 2010 tax return was originally due on April 15, 2011. While you may still file a late return outside of the three year statute, any refund due on returns outside the three-year limit will be disallowed.
The IRS does not accept electronic returns for any tax year other than the current year. If you use tax preparation software, you can still use the program to prepare late-year returns, however, you will not be able to e-file the returns through the software. Late returns must be printed and mailed to the IRS. You may still request your refund by direct deposit, but expect to wait at least three to four weeks for the IRS to process your paper return.
With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.