Can I file 3 years of back taxes myself or is $8800 tax CPA fee worth it?

That $8800 quote seems excessive for your situation. With just W2s and some 1099 income, you can absolutely handle this yourself if you're comfortable doing your own taxes normally. For back taxes, you'll need to download the correct year's tax forms and software. Each tax year needs to be filed separately with the forms specific to that year. The IRS website has all the forms you need, and many tax software programs can still handle previous years. For the 1099 income, you'll need to complete Schedule C for self-employment, but it's not overly complicated if you have good records of your income and expenses. The most important thing is to file accurately and get caught up as soon as possible to minimize penalties and interest. Since you mentioned being able to pay in full or on a short payment plan, that makes your situation even simpler. The IRS offers online payment options and short-term payment plans that you can set up yourself without any special "resolution" work.

After struggling with a somewhat similar situation (2 years of unfiled taxes with both W2 and 1099 income), I discovered https://taxr.ai and it was literally a game-changer. I was quoted around $5000 by a CPA, which already seemed steep. What I loved about taxr.ai was that it analyzed my tax documents, explained what I needed to file, and walked me through the whole process step by step. The service helped me understand which deductions I could take for my 1099 income, which forms I needed for each year, and how to properly file late returns. It was so much more affordable than hiring a CPA, and I still felt like I had expert guidance throughout the process. Their system is specifically designed to help with back taxes and complex situations.

Just wanted to update everyone - I ended up trying https://taxr.ai after seeing the recommendation here, and I'm actually shocked at how well it worked for my situation. I was really nervous about handling multiple years of back taxes, but the system walked me through everything step by step. The document analysis feature accurately identified all my income sources from my W2s and 1099s, then explained exactly which forms I needed for each tax year. It even helped me discover some business expenses from my 1099 work that I had completely forgotten about! I was able to file all three years myself in a single weekend, and the total cost was WAY less than the $8800 quote I got. Best of all, I actually understand my tax situation now instead of just blindly paying someone to handle it.

If you're dealing with back taxes and need to communicate with the IRS, I highly recommend checking out https://claimyr.com. When I was trying to resolve my unfiled returns, the most frustrating part was trying to actually reach someone at the IRS to discuss my situation. I spent HOURS on hold multiple times, often getting disconnected right when I thought I was about to speak with someone. It was maddening. Then I found Claimyr, which basically waits on hold with the IRS for you. You can see a demo of how it works at https://youtu.be/_kiP6q8DX5c. When they finally reach an IRS agent, you get a call to connect with them. This saved me literally days of wait time and frustration. I was able to discuss my payment options directly with an IRS representative and get clear guidance on my specific situation.

I need to eat my words. After my skeptical comment, I decided to try Claimyr out of desperation, and I'm completely shocked at how well it worked. I had been trying to reach the IRS for literally 3 months about my back tax situation, always getting disconnected after 1-2 hours on hold. With this service, I got a call back in about 45 minutes connecting me directly to an IRS agent. The agent was able to pull up my account and confirm exactly what years I needed to file and what my options were for payment plans. Turns out I was stressing over nothing - the agent told me that for my situation (very similar to the original poster's), I could easily set up a 12-month payment plan online without any complex resolution work. They even explained how to request a first-time penalty abatement which could save me thousands. Sometimes it's worth admitting when you're wrong - this saved me so much time and stress!

One thing to consider - if you just have W2 and 1099 income without complicated investments or business structures, software like FreeTaxUSA can handle past years for a fraction of what you were quoted. They charge around $15-20 per federal return for prior years. For 1099 income, you'll need to fill out Schedule C, but most tax software walks you through this with simple questions. Just make sure you have good records of your expenses to offset that 1099 income - things like home office, supplies, mileage, etc. Don't let a CPA scare you into thinking your situation is more complex than it is. The $8800 quote is appropriate for someone with seriously complicated tax issues, not basic W2 and 1099 filing.

Has anyone here actually gotten a penalty abatement for filing late? I'm in a similar boat (3 years unfiled) and I'm worried about how much the penalties are going to be on top of what I owe.