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Important thing nobody's mentioned yet - if you're filing a 2013 return, make sure you're doing it because you're owed a refund! If you actually owe money, you might face significant penalties and interest for filing this late. The statute of limitations for claiming refunds is generally 3 years, so for 2013 that would have expired in 2017. However, if you're filing because you owe, there's no time limit on the IRS collecting.
Wait, are you saying if I was owed a refund for 2013, I can't get it anymore? But if I owe THEM money, I still have to pay? That doesn't seem fair at all. How do I even know which situation I'm in before I file?
Yes, unfortunately that's exactly how it works. The IRS gives you 3 years to claim refunds, and after that window closes, you generally can't get that money. But they can still collect from you virtually forever (there's a 10-year statute of limitations on collection, but with many exceptions that can extend it). You won't know for certain which situation you're in until you prepare the return. That's why it might be worth working through the forms or using a service to calculate it first, before officially filing. If it turns out you owe a substantial amount with penalties, you might want to consult with a tax professional about your options.
Has anyone used FreeTaxUSA for old returns? I heard they keep prior year versions available and their prices are way better than TurboTax. Wondering if it's a good alternative for 2013 filing?
I used FreeTaxUSA for a 2014 return last year and it worked well. It was around $15 for the federal (they keep all the old tax year versions available) and another $15 for state if I remember right. Much cheaper than TurboTax. The interface isn't as fancy but it gets the job done and had all the forms I needed.
One thing nobody mentioned is that if you're owed a refund, there's no penalty for filing late! The IRS doesn't penalize you for filing late if they owe YOU money. The 3-year deadline is just to claim your refund, not a penalty deadline. BUT if you owed taxes (instead of being due a refund), then you'll face failure-to-file and failure-to-pay penalties plus interest. Just something to keep in mind depending on your situation.
Is this really true? I thought there was always a penalty for filing late regardless of whether you owe money or are getting a refund.
Yes, it's absolutely true! The IRS only charges penalties and interest when you owe them money and pay late. They have no incentive to penalize people who are owed refunds - they're actually saving money by holding onto your refund longer! The only "penalty" for filing late when you're due a refund is that you lose the refund entirely if you wait longer than 3 years from the original due date. So for 2020 taxes, you'd lose your refund if you don't file by May 17, 2024. But there are no failure-to-file penalties or interest charges when you're getting money back.
Don't forget to check if you need to file state tax returns too! Free federal filing options don't always include state filing for free, especially for prior years. Some states have their own free filing programs separate from the federal ones. Also, even with simple returns, you might qualify for credits you don't know about from those years. The Earned Income Credit and education credits could apply even with basic W-2 income. Don't leave money on the table!
Another option you might consider is using the Social Security Administration's Business Services Online (BSO) website. Even though you mentioned having trouble with it, there's actually a specific way to report zero wage W-2s through their system. When you're entering the W-2 information, check the "Zero Wage" indicator box in the W-2 Online application. This tells the system you're intentionally submitting a W-2 with no wage information. Here's the direct link to BSO if you need it: https://www.ssa.gov/bso/bsowelcome.htm
I tried that first but couldn't find the zero wage indicator box anywhere in the interface. Is it hidden in an advanced section somewhere? The BSO interface is not exactly user friendly.
It's definitely not in an obvious place! You need to first select "Report Wages to Social Security" from the main BSO menu, then choose "Create/Edit W-2/W-2c Online." After you've entered the employee information, there should be a checkbox labeled "Zero Wage" near the bottom of the wage information section. If you still don't see it, make sure you're using the W-2 Online application and not the W-2 file upload option, as they have different interfaces. Also, sometimes you need to complete all the required fields first (name, SSN, address) before that option becomes visible. The BSO system is definitely frustrating to navigate!
Has anyone tried just using regular tax software like TurboTax or H&R Block for this? I had a similar issue last year and ended up using H&R Block's small business option. It wasn't free but it handled my zero wage W-2 without any problems.
Don't forget that if you're filing Schedule C for the business (which you probably are with a single-member LLC), you'll also need to complete Schedule SE for self-employment tax. The withholding payments from the payroll company for the owner are actually estimated tax payments, not traditional withholding like you'd see on a W-2. Make sure you're separating the business owner's draws/payments from the employee payroll. Only the employees should have traditional withholding.
Is this still true if the LLC owner is on payroll too? Like if they're getting a W-2 from their own company?
No, that changes things significantly. If the LLC owner is receiving a W-2 from the business (putting themselves on payroll), then they're treating the LLC as an S-Corp for tax purposes, not a single-member LLC with pass-through taxation. In that case, the owner's W-2 would have withholding just like any employee, and those withholdings would be credited automatically when you enter the W-2 in TurboTax. The business would still file its own return (typically Form 1120-S for an S-Corp), and the owner would receive a K-1 for their share of profits beyond their salary.
If your husband is the only owner of the LLC, did you elect S-corp taxation? Because that would completely change how this all works. With S-corp status, he should be on payroll like a regular employee with withholding that would show up on a W-2 that gets entered directly into TurboTax.
Alice Coleman
One thing to keep in mind - you mentioned you need to file 1099s for contractors. Make sure your preparer is handling the actual 1099 filing with the IRS, not just amending your personal returns! You need to submit the 1099-NEC forms to both the contractors AND the IRS. When I ran a photography business, I didn't realize I needed to do both - I sent copies to my second shooters but didn't properly file with the IRS. Ended up with penalties even though I thought I did it right.
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Lara Woods
ā¢Oh no, I didn't even think about this! So I need to make sure the 1099s are actually filed with the IRS too? My new preparer didn't mention anything about that specifically, just that we were amending my returns. Now I'm worried again...
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Alice Coleman
ā¢Yes, you absolutely need to make sure the 1099-NECs are filed with the IRS! There are two parts to this process: sending copies to your contractors (which they need for their own tax filing) AND submitting them to the IRS. The deadline for filing 1099-NECs with the IRS is January 31st of the year following payment, so your 2022 forms were technically due January 31, 2023. There are penalties for late filing, but they're relatively small for small businesses if you file within 30 days of the deadline. The penalties increase the longer you wait, but filing late is still much better than not filing at all.
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Owen Jenkins
Did your preparer include the late filing penalties for the 1099s in your amendments? When I had to backfile 1099s last year, the penalties were around $50-$100 per form depending on how late they were. Not terrible, but something to budget for.
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Lilah Brooks
ā¢The penalties can actually be much higher depending on how many contractors and how late the filing is. I got hit with a $250 per contractor penalty for missing 1099s for my wedding video business. Definitely ask your preparer about this!
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