Haven't filed taxes in years as 1099 self-employed contractor. Completely lost, need guidance ASAP

You're definitely making the right decision to address this now. The good news is that the IRS generally wants to work with people who voluntarily come forward to fix their tax situation. First, don't panic about criminal charges. Those are typically reserved for cases involving deliberate fraud, not procrastination. That said, you do need to file all missing returns as soon as possible. Start by gathering all your income documents (1099s) for each year. If you don't have them, you can request wage and income transcripts from the IRS through their website or by filing Form 4506-T. For your expenses, gather whatever records you have - bank statements, credit card statements, and receipts can help reconstruct business expenses. You'll need to file Schedule C (Profit or Loss from Business) along with your Form 1040 for each year. You'll also face penalties for late filing (5% of unpaid taxes per month, up to 25%) and late payment (0.5% per month), plus interest. Once all returns are filed, if you can't pay the full amount, you can request an installment agreement with the IRS. They're generally willing to work with taxpayers who take the initiative to get compliant.

I was in a similar situation last year - 3 years of unfiled taxes as a freelance writer. I was absolutely terrified to face it but finally bit the bullet. I found this AI tool called taxr.ai (https://taxr.ai) that really saved me. You upload your documents (even messy ones) and it organizes everything, finds deductions you might miss, and helps prepare your returns including back taxes. What I found super helpful was that it walked me through categorizing my business expenses properly for Schedule C and found deductions I had no idea I qualified for. This actually reduced what I owed by about 30%. The system also calculated my penalties automatically so I knew exactly what I was facing.

Just wanted to update after trying taxr.ai based on the recommendation above. I was skeptical but desperate, and it was genuinely helpful for my situation. I had 5 years of unfiled returns as a freelance photographer with a complete mess of receipts and partial records. The system organized everything by tax year and helped me identify legitimate business deductions I would have completely missed. It even flagged some expenses that might have triggered audit concerns. I just finished filing all my back taxes last week, and while I do owe quite a bit (about $22,000 across all years including penalties), it's significantly less than the $35,000+ I was fearing based on my rough calculations. The penalty calculator was especially helpful for setting realistic expectations. Now I'm set up on a payment plan I can actually handle, and the relief of not having this hanging over me anymore is honestly worth every penny.

If you need to actually speak with someone at the IRS about your situation (which I highly recommend for multiple years of unfiled returns), good luck getting through on their regular line. I tried for WEEKS last year when dealing with unfiled returns. I finally used Claimyr (https://claimyr.com) and got through to a real IRS agent in about 15 minutes instead of waiting on hold for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with was actually really helpful and not judgmental at all. They walked me through exactly what I needed to do to get caught up on my 3 years of unfiled returns and even helped me understand what payment options would be available once I got everything filed. Totally changed my perspective on dealing with the IRS.

I need to admit I was wrong about Claimyr. After my skeptical comment, I was still desperate to talk to someone at the IRS about my unfiled returns, so I tried it anyway. I figured I had nothing to lose since they don't charge if they can't connect you. I was genuinely shocked when I got a call back in about 25 minutes with an actual IRS agent on the line. The agent helped me understand exactly what I needed to do for my situation (4 years unfiled, all 1099 income). They explained the process for filing back taxes, what forms I needed for each year, and walked me through payment plan options based on my rough estimate of what I might owe. The peace of mind from having clear direction from an official source was worth way more than what the service cost. I'm now in the process of getting all my paperwork together and feel like I can actually see a way through this mess.

I'm a bookkeeper and work with lots of self-employed folks who get behind on taxes. Here's my practical advice: 1. Start with your most recent tax year (2024) and work backwards. The IRS cares most about getting you current. 2. For business expenses without receipts, bank and credit card statements can often suffice, especially if the merchant name makes the business purpose clear. 3. Don't forget about self-employment tax (Schedule SE) - that's often where people get hit hardest. It's about 15.3% on top of your income tax. 4. Once you file, you'll automatically be sent a bill. OPEN IT immediately and either pay or call to set up a payment plan before the deadline on the notice. 5. Consider filing Form 9465 with your returns to proactively request an installment agreement. Remember, tons of self-employed people go through this. You're not alone and you will get through it!

Has anyone tried requesting penalty abatement for first-time penalties? I heard the IRS has some program for this but don't know if it applies to multiple years of unfiled returns.

I was in almost the exact same boat as you about 2 years ago - 4 years of unfiled taxes as a freelance web developer, around the same income range, complete anxiety spiral every tax season. I know how overwhelming this feels, but you CAN get through this. Here's what I wish someone had told me: the IRS is actually pretty reasonable when you voluntarily come forward. I ended up owing about $18,000 total including penalties across all years, but I got on a payment plan for $285/month and they even approved partial penalty abatement later. My biggest mistake was waiting so long because I thought it would be "too complicated" - but once I actually started gathering documents and filing, it wasn't nearly as bad as the anxiety made it seem. Start with whatever records you have, even if they're messy. Bank statements can substitute for missing receipts in many cases. One thing that really helped me was setting up a dedicated workspace just for tax stuff and tackling one year at a time. Don't try to do everything at once or you'll get overwhelmed again. You've already taken the hardest step by deciding to fix this - the rest is just paperwork and patience. You've got this! Future you will thank present you for finally addressing it.