Can I file last year's taxes ?(2021) If not what will happen? Will I get fined?

[kfelipe1992-gmai]

Filing taxes gives me high end anxiety so I avoided it last year. I didn't file my taxes now that I'm in a healthier mental space I want to know if its possible to file my taxes. If not is there a penalty for not doing so?

[Critter-3]

You are too late to use online TurboTax.    Online for 2021 is permanently closed.   You can purchase the CD/download and use it on a full PC or Mac, and then mail your tax return.  It cannot be e-filed.

Online preparation and e-filing for 2019 and 2020and 2021 is permanently closed.

To file a return for a prior tax year

 If you need to prepare a return for 2019, 2020 or 2021 you can purchase and download desktop software to do it, then print, sign,  and mail the return(s)

https://turbotax.intuit.com/personal-taxes/past-years-products/

You may also want to explore purchasing the software from various retailers such as Amazon, Costco, Best Buy, Walmart, Sam’s, etc.

Remember to prepare your state return as well—if you live in a state that has a state income tax.

https://ttlc.intuit.com/community/state-taxes/help/how-do-i-contact-my-state-department-of-revenue/0... 

When you mail a tax return, you need to attach any documents showing tax withheld, such as your W-2’s or any 1099’s.  Use a mailing service that will track it, such as UPS or certified mail so you will know the IRS/state received the return.

Federal and state returns must be in separate envelopes and they are mailed to different addresses.  Read the mailing instructions that print with your tax return carefully so you mail them to the right addresses.

Note:  The desktop software you need to prepare the prior year return must be installed/downloaded to a full PC or Mac.  It cannot be used on a mobile device.

If you are getting a refund, there is not a penalty for filing past the deadline.  If you owe taxes, the interest/penalties will be calculated by the IRS based on how much you owe and when they receive your return and payment. The IRS will bill you for this; it will not be calculated by TurboTax.

[pk]

@kfelipe1992-gmai 

(a)   Please change your sign-in id -- it looks too much like an email address and may get you un-wanted attention

(b) IRS gets a copy of all your earnings  that are reported to you on W-2, 1099-INT / B/ DIV, NEC etc etc.. IRS runs a program called AUR ( Automatic Under-Reporter ) -- this matches  all the informational returns ( W-2 , and the 1099s )  to your filed return -- and flags mismatch.  Thus if you do not file , there is good chance that IRS will send  you a notice asking for payment  or that you need to file a return.

(c) While the above -- (b) is true -- there is always a judgement call. For example , if  you had previously filed as single  and the current year informational returns  show your total  income is  likely to be around 10,000 ( this does not require a filing because  your AGI LESS standard deduction  is likely to  produce a taxable income of ZERO ), , IRS may ignore the non-filing. But this also means that any withheld taxes will not be refunded to you.  On the other hand  if you had a 1099-NEC / MISC showing 10,000 as gross income, IRS definitely will contact  you --- you owe Social . Security & Medicare taxes .  What I am trying to tell you is that  IRS  noticing and taking action on a non-filer depends very much on the exact  facts and circumstances ( from IRS point of view ).

(d) My humble request is that you get the software for 2021 and file  your returns as required by law.

(e) If you owe  any monies for a non-filed / delayed filing  can be quite painful --- 1. actual amount due, 2. interest charges , 3. penalty  for failure to pay and 4. failure to file.

(e).  I have known quite a  few people  whom are extremely nervous  about IRS and tax filing. I would like to say the following on this  ( in addition to noting that you are not alone feeling this way ) :

                        1. IRS  generally is not a monster , would not put you in jail but yes , can be  a bit  unsympathetic and perhaps unforgiving.

                        2. If you cannot face preparing a return, perhaps you should consider having  one of the free services  ( TaxAid, AARP etc. etc ) or  tax professional  help you prepare and file the return for you.

                        3. consider using IRS free file  for tax prep and filing  ( if you qualify ).

                        4. Use TurboTax or similar  and  there are always volunteers whom are only too happy to help you through this  often painful process.

Is there more I can do for you 

[guywong]

Yes, you can file your 2021 tax return and I encourage you to do so ASAP.  However, you cannot use TurboTax  e-file to submit your tax return even though IRS "Modernized E-file" system does accept e-filed tax returns using professional tax preparation software for the current and two prior years worth of returns, you must paper file it with TurboTax.

Until you file your tax return, the statue of limitation will stay open forever.  If you do not file your return, IRS will send you notices asking you to file.  If you ignore the notices, IRS will prepare a tax return for you as if you're single with no dependent and no itemized deduction, you won't get any tax refund even if the IRS prepared return shows an overpayment.  In other words, the IRS prepared return will most likely assesses taxes at the highest level.  If you are a chronic non-filer, there could be criminal prosecution.  3 years after the original due date, or 4/15/25, even if you file a tax return and the return shows an overpayment, the overpayment will not be refunded to you.  You will simply lose it.

If you owe taxes, there will be interests and civil penalties tagged on.  Interest is calculated at a statutory rate, compounded daily. Civil penalties are generally assessed at 5% per month, up to 25%.

https://www.irs.gov/individuals/dont-lose-your-refund-by-not-filing

Don’t Lose Your Refund by Not Filing

Many people may lose out on their tax refund simply because they did not file a federal income tax return. By law, they only have a three-year window from the original due date, normally the April deadline, to claim their refunds.

Some people may choose not to file a tax return because they didn't earn enough money to be required to file. Generally, they won't receive a penalty if they are owed a refund. But, they may miss out on receiving a refund.

https://cs.thomsonreuters.com/ua/ut/cs_us_en/utwapp/elf/faq/years-supported-for-e-filing.htm

1040 

• The IRS will accept tax year 2022 electronic files during processing years 2025, 2024, and 2023.
• The IRS will accept tax year 2021 electronic files during processing years 2024 and 2023.
• THe IRS will accept tax year 2020 electronic files during processing year 2023.
• Tax year 2019 (and prior years) returns must be filed on paper.

https://proconnect.intuit.com/support/en-us/help-article/electronic-filing/e-filing-prior-year-retur...

E-filing prior year returns in ProSeries

The IRS Modernized E-File (MeF)system allows returns for three tax years, the current year and the two consecutive prior tax years, to be filed electronically. Most states also follow these rules. Currently this means you can e-file from ProSeries 2022, 2021 and 2020. 

(Note: ProSeries and Lacerte are both Intuit products, used by tax professionals and they both support e-filing 3 years of tax returns.  I don't know why TT doesn't support that.)

[Critter-3]

@guywong 

Just a couple of things ... only some  paid tax pros can efile prior year returns  and  only professionals can use the professional programs since you need to be an efile provider which the regular turbotax users are not.  

[pk]

And have PTIN and be a e-file creator/transmitter approved by the IRS.

Just buy the TurboTax for 2021 and paperfile -- simplest path ( good old KISS principle )

[guywong]

You folks all missed my point.  I was complaining about TT not supporting e-filing of the two previous tax years returns.  I specifically pointed out he needed to paper file his 2021 tax return even though all the PROFESSIONAL tax software support e-filing of 3 years returns with Modernized E-file.  My question is why doesn't TT do the same?

At no time did I suggest the OP buy any professional tax software so he could e-file his 2021 return,  The cost would be prohibitively high.  I know because I had used Lacerte for decades before I retired.  Support from Intuit has declined since Lacerte was bought out by Intuit, most likely to keep the bottom line up.  It seems to me TT is no different as demand for e-filing delinquent return is probably not high.

This is my first year using TT.  I find it tedious.  TT doesn't remember all the previous answers and asks many same questions over and over again.  IRS also now permits e-filing of amended and superseding tax returns.  Have no idea if TT supports that.  If not, it should.

IRS recently submitted a Direct File report to Congress, see IR-2023-103.  Hopefully, with competition, TT will provide better services.

Direct File page from a former employer of mine:

https://kpmg.com/us/en/home/insights/2023/05/tnf-irs-report-e-filing-sy[product key removed]am.html

IRS report on potential free e-filing system; pilot program for 2024 filing season

Feasibility of providing a free, voluntary, IRS-run electronic filing system