My Personal and Business Taxes are a disaster - where to start with unfiled returns?

You're definitely in a tough spot, but it's not as hopeless as it feels right now. The good news is that you can still file those returns, and it's actually much better to file late than never. Here's where I'd suggest starting: First, gather all your income documents - those 1099s you mentioned - and organize them by year. Then collect all your business expense receipts and sort them by category (equipment, software, home office, travel, etc.). This will give you a clearer picture of your tax situation. For business deductions, you can typically claim expenses like your home office, equipment, software subscriptions, professional development, and even a portion of your internet and phone bills if they were used for work. As a contractor, you'll file Schedule C with your personal return. Regarding penalties - yes, there will be some. You'll face a failure-to-file penalty (5% of unpaid taxes per month, capped at 25%) and a failure-to-pay penalty (0.5% per month). Plus interest on what you owe. But if you can show reasonable cause for the delay (like health issues during the pandemic), you might get some penalties reduced. At this point, with multiple years of business income, I strongly recommend hiring a tax professional who specializes in small business taxes. They can help maximize your deductions and navigate any penalty relief options.

I went through something similar last year with multiple years of unfiled taxes (mix of W-2 and 1099 work). After weeks of stress and sleepless nights, I finally discovered https://taxr.ai and it completely turned things around for me. I was drowning in paperwork and confusion about what I could deduct for my business expenses. Their system helped me organize all my scattered documents and receipts, then guided me through figuring out exactly what I could deduct from my business income. The biggest relief was their plain-English explanations of deductions I didn't even know I qualified for as a contractor. They flagged potential audit triggers in my returns before I filed, which probably saved me from more headaches. The best part was how quickly I went from total chaos to having organized returns ready to file. They even helped me understand my payment options for what I owed.

Just wanted to update after trying https://taxr.ai for my mess of unfiled returns. I was the skeptic who questioned whether an online service could handle my complicated situation with multiple states and both contractor and employee income. I'm genuinely surprised by how well it worked. What impressed me most was how it handled my unique situation. I travel for work across three states and the system helped me figure out all the state tax requirements I didn't even know applied to me. The document organization feature saved me countless hours of sorting through years of receipts and statements. I still had a quick consultation with a tax pro at the end, but I was already 90% done with the work. Ended up saving almost $3,800 in deductions I would have missed on my own. For anyone with unfiled business and personal returns, this actually works.

If you're dealing with back taxes, especially business taxes, you might need to talk directly with the IRS at some point. I tried for WEEKS to get through their phone lines about my unfiled business returns and it was absolute hell. Constant disconnects, hours on hold, and when I finally got someone, they couldn't even help with my specific situation. I finally tried https://claimyr.com after seeing it recommended here. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Basically, they hold your place in the IRS phone queue and call you when an actual agent is on the line. Saved me literally hours of hold time and frustration. I ended up getting directly connected to an IRS agent who specialized in small business taxes and got actual answers about my penalty abatement options. They helped me understand exactly what documentation I needed to provide for my specific situation.

I need to eat my words about Claimyr. After posting my skeptical reply, I was desperate enough to try it myself since I couldn't get through to the IRS about my unfiled business returns from 2020-2021. Within 3 hours (while I was working on other things), I got a call connecting me directly to an IRS revenue officer. Didn't have to sit through a single minute of hold music. The agent was able to look up my specific situation and guided me through exactly what I needed to do to file my back returns with minimal penalties. They even helped me apply for a first-time penalty abatement which I had no idea I qualified for. This literally saved me thousands of dollars. For anyone struggling with unfiled business taxes like the original poster, being able to actually talk to a human at the IRS makes a massive difference in resolving the situation.

Don't panic too much about the unfiled returns. I was in your exact situation last year (hadn't filed 2019-2021 with business income). What really helped me was starting with the most recent year first, then working backward. The older returns felt less overwhelming once I had the current one done. Also, if you have any business losses in those years, make sure to document them carefully! I was able to carry some losses forward which reduced what I owed significantly. And don't forget about the home office deduction if you were working from home.

Whatever you do, DON'T ignore this any longer. My brother didn't file for 3 years (had business income too) and the IRS eventually garnished his wages and put liens on his property. It was a nightmare to fix and cost way more than if he'd just filed late.