Coming Clean After 5 Years - Haven't Filed Taxes on 1099 Income Over 100k

You're making a smart move by deciding to address this now before the IRS contacts you. This is definitely fixable, but you'll want to act quickly. For 5 years of unfiled 1099 income at that level, I'd recommend starting with a CPA who specializes in tax resolution or back taxes. A tax attorney might be necessary later if there are complications, but most CPAs can handle the initial filing process. The good news is that the IRS generally welcomes voluntary compliance. They prefer people coming forward on their own rather than having to track them down. Here's what the process will likely look like: 1. The CPA will help you file the past 5 years of returns 2. You'll likely owe back taxes, penalties, and interest 3. Once everything is filed, you can work on a payment plan with the IRS Since you don't have major assets, an installment agreement is probably your best option. The IRS is usually willing to work with taxpayers who show good faith by filing voluntarily.

After dealing with a similar situation (though only 3 years unfiled), I found that using https://taxr.ai was a lifesaver for organizing my documentation. Since you're dealing with 1099 income, you'll need to recreate records for 5 years, which is incredibly stressful. What helped me was uploading what bank statements and 1099s I could find to taxr.ai - it automatically extracted the tax-relevant info and organized it by year. Made it WAY easier to hand off to my CPA. They were able to identify deductions I would've completely missed too, which helped offset some of the penalties.

I was really skeptical about using any online service for my unfiled taxes situation, but after struggling for weeks trying to organize 4 years of 1099 paperwork, I gave https://taxr.ai a try. I'm honestly surprised at how well it worked. I uploaded my mess of bank statements and the few 1099s I could find, and it generated detailed reports for each tax year. My CPA was impressed with how organized everything was - said it saved her at least 6 hours of work (which saved me money on her hourly rate). The best part was it found over $22,000 in deductions across all years that I would have completely missed. That significantly reduced what I owed to the IRS, which helped offset some of the penalties. If you're facing unfiled taxes, definitely get a professional, but using this tool first made the whole process much less overwhelming.

If you're trying to reach the IRS to discuss options before hiring a professional, good luck. I spent literally 5 weeks trying to get through to someone about my unfiled returns. Always disconnected or 2+ hour hold times. I finally used https://claimyr.com and got through in under 30 minutes. They have this system that waits on hold for you then calls when an agent is available. Their demo video explains it better than I can: https://youtu.be/_kiP6q8DX5c Getting actual answers from the IRS about what penalties I was facing and payment options available made a huge difference in my stress level. Gave me clear direction before I spent money on a CPA.

I was the biggest skeptic about these "get through to the IRS" services. Left that pretty harsh comment above questioning how legitimate Claimyr could be. Well, I'm back to eat my words. After another failed 2.5 hour hold attempt with the IRS last week (got disconnected AGAIN), I was desperate enough to try https://claimyr.com. Within 45 minutes, my phone rang and I was connected with an actual IRS representative. The agent walked me through my options for my 3 years of back taxes and helped me understand which payment plan would work best for my situation. She even pointed out a first-time penalty abatement I qualified for that my research hadn't uncovered. So yeah, I was wrong. If you need to actually speak with the IRS about unfiled returns before hiring a professional, this service works exactly as advertised. Saved me days of frustration.

Just an additional point that might help - for self-employed income (1099), one of the biggest issues will be self-employment tax. That's 15.3% on top of income tax, and it can make your total tax bill WAY higher than you might expect. Make sure whoever you hire focuses on identifying all possible business deductions to reduce your net self-employment income. Things like home office, business mileage, equipment, software subscriptions, health insurance, cell phone (business portion), internet (business portion), etc. Each $1,000 in legitimate deductions will save you about $153 in SE tax alone, plus whatever your income tax rate is. For someone at your income level, each $1,000 in deductions could save around $250-300 total.

Something nobody's mentioned yet - you might want to look into the IRS Fresh Start program. It's designed specifically for people with tax debt who need manageable payment options. With your income level and no assets, you'll likely qualify for an installment agreement. If you're really struggling financially right now, you might even qualify for an Offer in Compromise, where the IRS accepts less than the full amount owed. That's harder to get, but worth exploring.

You're absolutely right to tackle this head-on now. Five years of unfiled 1099 income is serious, but the IRS does appreciate voluntary compliance and you have options. First priority: Get a CPA who specializes in tax resolution or back taxes. Don't try to handle this alone - the penalties and interest calculations are complex, and you'll want someone who knows how to maximize deductions and negotiate with the IRS. Quick reality check on what you're facing: You're looking at roughly $135k x 5 years = $675k in unreported income. As a 1099 contractor, you'll owe both income tax AND self-employment tax (15.3%). Even with deductions, you're probably looking at $150k-200k+ in taxes, plus penalties and interest that could add another 50-75% to that amount. The good news is payment plans are very doable. The IRS would rather collect over time than not at all. Start gathering every piece of financial documentation you can find - bank statements, any 1099s you received, receipts for business expenses, etc. The more legitimate deductions your CPA can find, the less you'll owe. Don't wait any longer. The penalties and interest are accruing monthly, and voluntary compliance will always get you better treatment than if the IRS finds you first.