How to handle possible refunds from filing previous years tax returns?

[sher5625]

The situation is that I'm currently working on preparing and filing tax returns for 2016, 2017 & 2018. I also currently have tax liabilities from earlier years filings.

So when preparing the tax filing for 2016 and if it shows that I should be getting refund from both a federal and state, do I then enter those refund amounts when I prepare my tax filing for 2017 tax returns? Also, My understanding is that I would not actually be getting the refunds as both federal and state would use it towards my previous tax liabilities. But I need to know how to handle those calculated refunds for tax files of subsequent year. I believe I will have the same situation when I prepare tax returns for 2017 and expect a refund (that will probably be withheld to pay existing tax liabilities, but how I would handle the "refund" amounts on the 2018 tax return.

Thanks in advance for any help/advice.

[BarbL · Accepted solution]

Refunds are reported in the year they are actually received, so there is no adjustment on the returns you are currently filing.  The refunds would be received this year, and be reported on your 2019 filing next year.  

[stepmommat]

If the government owes you money back you have up to 3 years to claim it and they may owe you interest, hopefully  they have to pay you interest but if you owe them money and didn't file on time you will be charged a monthly penalty up to 5% I  believe.  So it's always best to do your taxes on time. It doesn't matter how old the debt is they want their money. It's funny how they act like it's water under the bridge when they owe you money though you better claim it in 3 years or you can forget about it.