In early 2019, I thought all of my tax documents had arrived in the mail, so I sat down to file my taxes in early March. Everything looked great so I filed my return with the IRS and got on with my fun business.
However, in early April, an unexpected document popped up in the mail. It was a 1099 form for a very small amount of freelance work I’d done and forgotten about the previous year. For some reason the document was only sent to me shortly before this year’s tax deadline.
This was, of course, an unfortunate situation. Would I be charged fees or interest charges? Which documents must I submit? Should I just pretend I haven’t seen it? (Quick answer to the last question: No.) Here’s what you need to know about such situations.
Why should this happen?
Most often, people get all tax documents by early February and file their income taxes with the IRS by the filing deadline (mid-April for most years, mid-May 2021). However, this path is not always smooth. There are a few reasons why you might not get a tax document until you have already filed your taxes.
A common reason is that it may actually have been lost in the mail. If an item is not delivered properly and is lost in the mail system, it can be displayed weeks or months after dispatch.
Another reason is that the person or company creating the tax document delayed its creation. Most of the larger companies have accounting services that do this very efficiently on their behalf. However, some companies may try to address this themselves. If a company does not organize and archive its own records, it may not be efficient in getting your tax documents to you. The IRS deadline for sending most tax documents to individuals is January 31st. However, companies can and must meet this deadline, which can result in documents arriving at your doorstep quite late.
Am i in trouble
If this happens to you You’re not in trouble right away. You did not commit fraud and purposely did not miss any deadlines. The IRS is actually very flexible and forgiving in such situations.
However, Once you have the document in hand, there is no way to ignore it. The IRS is likely to be aware of the situation as the person or company who sent you the tax document most likely also filed it directly with the IRS. The only reason they wouldn’t contact you is if they just don’t notice. Additionally, the longer you sit on the document, the more likely you are to face late fees, fines, and other penalties.
What if you ignore it? No matter what, you are committing tax fraud. The question is whether the IRS will notice the scam. Your best approach is to deal with it immediately as this will minimize and likely eliminate late fees and penalties.
Your best approach with the IRS is this always immediately take action on your own behalf to correct the record. Please follow the steps below as soon as possible so that a tax error caused by someone else’s negligence does not become your own tax fraud. If you wait, you Makes will not be noticed by the IRS, but if they do notice you you will face many difficulties and tax penalties.
Dealing with a late tax document
Ideally, you should have received the tax document before the IRS contacted you about it. In this situation, the process is pretty straightforward. You simply file IRS 1040-X which will amend your tax return with updated information. If you’ve used tax filing software like TurboTax, it’s very easy to do within the software. If you have appointed a tax advisor, simply contact your tax advisor immediately.
If the new tax documents show that you made more income than you originally reported, it could mean you owe more tax. Don’t worry – the amount of actual tax you owe is always a relatively small percentage of the new income you report. Don’t worry about a higher tax bracket because that doesn’t mean you suddenly owe a ton more taxes. If the extra amount you owe is trivial, just pay it. If it is enough to cause you difficulty, you should contact the IRS directly to discuss your options.
In some situations, especially if you receive the tax document well after the filing deadline, additional fines or fees may apply. In this case, contact the IRS directly. You may be able to file Form 843 requesting a waiver of these fines and fees. Again, the IRS is flexible with those who proactively pay taxes owed and often waive fees in situations beyond your control.
How I dealt with late tax filings
How did I handle my own late document? The IRS hadn’t contacted me about this yet, so I quickly filed a 1040-X form along with a small additional tax payment (since the late form showed additional income that I hadn’t originally submitted). There were no fees and the IRS has not contacted me about it in any way. The process was simple and took less than 30 minutes. I’ve spent more time worrying about when it actually took to resolve the situation.
If I had waited to submit the document to the IRS can contacted me about it. In this situation, I would have owed the taxes as well as potential interest on the unpaid taxes and other penalties. Just taking care of it right away and paying the taxes I actually owed made it a bit of a problem.
Consult a tax advisor about your specific situation. This article is provided for informational purposes and is not intended as expert advice. We appreciate your feedback on this article. contact us under Inquiries@thesimpledollar.com with comments or questions.