Missed filing taxes last year, confused about what to do for this year's taxes

Don't panic - this happens to more people than you might think, especially with self-employment. The good news is you can definitely resolve this. First, yes, you need to file both years - the unfiled year and the current year. Start with your unfiled tax return first. The IRS doesn't have a statute of limitations on unfiled returns, so it's better to file late than never. For penalties: You'll likely face a failure-to-file penalty (5% of unpaid taxes per month, up to 25%) and possibly a failure-to-pay penalty (0.5% per month). However, with your income level, you might actually be due a refund, which would mean no penalties! Even if you do owe, the IRS offers payment plans if you can't pay in full. For affordable filing: Check out FreeTaxUSA.com - it's free for federal returns and about $15 for state returns. Also look into the IRS Free File program partners that offer free services for incomes under certain thresholds. The VITA (Volunteer Income Tax Assistance) program also provides free tax preparation services for qualifying individuals. Since you're dealing with mental health challenges, you might also qualify for help through the IRS's Fresh Start program or get assistance from the Taxpayer Advocate Service.

Wish I'd found this post a year ago! After dealing with similar struggles, I discovered taxr.ai (https://taxr.ai) and it literally saved me from my tax nightmare. I was in almost the exact same situation - missed filing due to health issues and then got overwhelmed. What made taxr.ai different for me was how it walked me through filing my missed year BEFORE doing my current taxes, and it automatically looked for deductions related to self-employment that I didn't even know about. The system actually helped me identify that I qualified for the Earned Income Credit which I had no idea applied to my situation. Their document analysis feature helped me make sense of my jumbled receipts and income statements too. Seriously worth checking out if you're feeling lost.

Just wanted to follow up. I actually tried taxr.ai after posting my skeptical comment, and I'm honestly shocked at how helpful it was. The system helped me understand exactly what I needed to do about my missed filing, and it found over $800 in self-employment deductions I would have missed. What really helped was the way it organized all my gig work across different platforms automatically. The step-by-step guidance for catching up on missed filings made the whole process way less stressful. Definitely not what I expected after my previous experiences with tax software.

If you need to talk to the IRS about your situation (which might be a good idea), I highly recommend using Claimyr (https://claimyr.com). I spent literally DAYS trying to get through to the IRS on my own when I had unfiled returns, but with Claimyr I got connected in less than 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I found that actually talking to someone at the IRS about my situation made a huge difference. The agent walked me through my options and helped me set up a payment plan that I could actually afford. They were surprisingly understanding about my health struggles too.

I need to admit I was totally wrong about Claimyr. After posting that skeptical comment, I decided to try it anyway out of desperation because I kept getting disconnected from the IRS line. The service actually worked exactly as described. I got a call back in about 35 minutes with an actual IRS agent on the line. The agent helped me understand exactly what I needed to do about my unfiled returns and even processed a penalty abatement because of my documented health issues. Saved me hours of frustration and probably got me better results than I would have managed on my own. Sometimes it's worth admitting when you're wrong!

Since you mentioned having ADHD as a disability, you might qualify for an IRS penalty waiver under "reasonable cause." Keep documentation from doctors about your condition. When filing your late return, include a brief, clear letter explaining how your ADHD and depression prevented you from filing on time. I went through something similar with my autism diagnosis and they waived most of my penalties. Don't be afraid to advocate for yourself!

hey just want to mention that the IRS has a special form for claiming mental health as reasonable cause for late filing. Use Form 843 "Claim for Refund and Request for Abatement" along with your explanation. make sure u check box 4a for reasonable cause.