Always File a Tax Return
Why do I recommend to always file a tax return even if you are not required to file? Start the statute of limitations running for audit For collections regarding issues in a particular year's return Avoid identity theft 1. There is no statute of limitations on a late/no filed return. You never know what will trigger and audit. The IRS can go back to any unfiled year and assess a tax deficiency along with penalties. Will you have the documentation to support your claim and get penalties removed? Example: You receive 1099s but you have deductions that create a net loss and bring you under the filing threshold. The IRS receives the 1099s and they're looking for those 1099s to show on a tax return. They don't know there's a loss, unless you file a return showing the deductions that create a loss. Alternatively, the IRS can generate a substitute return that may produce a higher tax bill with penalties and interest. 2. Once you have filed your return the IRS has 3 years...