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haven't filed taxes for a few years

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fcobarr

Member
What is the name of your state? NJ

Hopefully I'll make a long story short.

I haven't filed my 05 state, 06 Federal and State, and 07 state and federal yet.

Early 05 I started a business and haven't had any income since. In May 06, I sold my house and had substantial gains from it (almost $200K). I owned the house for 6.5 years prior to selling. Since May 06, I moved back in with my parents and have been paying rental ($250/month). Between interest income and a part time job which my wife has there is about $12K of income/year for 05, 06 and 07.

In 07 there was some income from my wife getting disability payments due to a car accident...do I need to include disability payments as income on my return?

Should I claim that I pay rent to my parents or does that just create problems if they don't report it as income?

Since I owned the home for 6.5 years do I have a tax liability on the gains from selling the house? Or, is it exempt?

Is it critical that I file the returns for the years I've missed? Or, can I file for 07 and move forward from this point?

Finally, is this all just a big mess and I need an accountant to make all my filings current? How much would a scenario like this cost...i've never used an accountant before.

Thanks for your help. Hope I'm being clear.
 


tranquility

Senior Member
Early 05 I started a business and haven't had any income since. In May 06, I sold my house and had substantial gains from it (almost $200K). I owned the house for 6.5 years prior to selling.
While the code does not require it, we like reporting such things on schedule D.

Between interest income and a part time job which my wife has there is about $12K of income/year for 05, 06 and 07.
It sounds like a retun will be required.

In 07 there was some income from my wife getting disability payments due to a car accident...do I need to include disability payments as income on my return?
It depends on the nature of the payments.

Should I claim that I pay rent to my parents or does that just create problems if they don't report it as income?
What is that "claim" going to get you?

Since I owned the home for 6.5 years do I have a tax liability on the gains from selling the house? Or, is it exempt?
It depends on the facts and the numbers.

Is it critical that I file the returns for the years I've missed? Or, can I file for 07 and move forward from this point?
There are advantages in the penalties and the intent in criminal matters of filing before the IRS comes talking. I always recommend people filing. It just seems to work out better.

Finally, is this all just a big mess and I need an accountant to make all my filings current? How much would a scenario like this cost...i've never used an accountant before.
It's not that big of a deal. I suspect that if you get a good deal you will have the returns done from $150-250 per year, depending on the location.
 

LdiJ

Senior Member
Based on what you are saying its unlikely that you will have much, if any, taxable income for the years in question, but it really would be in your best interest to file, and I am not even sure that it would cost you as much as Tranq suggests for a professional to handle it for you.

You are clear on the house, because you had a 250k exclusion for capital gain, but its just dumb not to file the returns and get it all on "on record".
 

fcobarr

Member
Thanks for the responses I don't feel quite as overwhelmed now.

Just one last question...should I start from 05 and work my way forward or try to get current on my 07 returns and then worry about 05 and 06?

Thanks again.
 

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