Missed Filing 2023 Taxes - Have Child Tax Credit - What's My Best Approach?

You absolutely need to file your 2023 return ASAP. The Failure-to-File penalty accrues at 5% of unpaid taxes for each month your return is late, up to 25% maximum. Even with Child Tax Credit eligibility, you're still required to file regardless of whether you ultimately owe or receive a refund. The IRS prioritizes compliance history in future interactions, so getting back on track immediately is crucial for your tax standing.

Did you perhaps receive any notices from the IRS about your unfiled 2023 return? They typically send CP59 notices after a certain period, and I'm somewhat surprised you haven't mentioned any communications from them, especially if you've been filing consistently in previous years.

I've received exactly 2 notices from the IRS so far - the first came 4 months after the filing deadline and the second arrived 6 weeks ago. Both were reminder notices without specific penalty amounts. Based on my calculations with 3 gig platforms and approximately $48,000 in income, I'm anticipating the Child Tax Credit of $2,000 will offset most potential liability, but I'm preparing for roughly $300-500 in penalties depending on when I file.

I've seen this situation dozens of times with clients. First, file 2023 ASAP before starting 2024. For software alternatives, I've had good experiences with FreeTaxUSA and Cash App Taxes (formerly Credit Karma Tax). If you get stuck dealing with penalties or need to set up a payment plan, calling the IRS is crucial but nearly impossible these days. I recently used Claimyr (https://www.claimyr.com) when helping a client in your exact situation - they got me connected to an actual IRS agent in about 15 minutes when I'd been trying for days. The agent was able to abate some penalties since my client had a clean filing history before the missed year.

Have you considered whether you might qualify for First Time Penalty Abatement? Given your history of compliance, you might be eligible! Important things to consider: • You must file the return first before requesting abatement • The IRS looks for a clean compliance record for the 3 prior years • You need to have paid or arranged payment for any tax due • Request must be made within a reasonable timeframe Time is critical here - each day increases potential interest charges!

Last year I was in almost the exact same boat - missed filing 2022 taxes while dealing with family health issues. I compared costs between tax prep options and found TurboTax wanted $119 for the prior year return plus $59 for state, while FreeTaxUSA charged $19.95 for federal and $14.95 for state. The interface wasn't quite as polished, but it imported my W-2s and 1099s just fine. I had to manually enter some investment data that TurboTax would have imported automatically, but saved almost $150 total. The actual filing process took 2.3 hours compared to my usual 1.5 hours with TurboTax.