In 2013, my then 23 yr old daughter was in college full time but also worked 30 hrs/week. I claimed her as a dependent on my taxes since I did provide more than half of her support. I did not think she needed to file since I claimed her. I am finding out now that she should have filed her own taxes as well. I'm not quite sure what to do now. I'm assuming she should have filed both Federal and state (MA) returns. Her only income is her wages ($20,000) - no interest, dividends or anything like that. She had health insurance for the full year through my me. I'm sick about this and really can't afford to go a tax professional. Are we in serious trouble???==========>>>>>>>>>>>>> she must file a federal income tax return if her income is above a certain level; which varies depending on her filing status, age and the type of income she receives.however, Nobody can force her to file her return it is up to her; the IRS SOL says the IRS has 3 years to give you a refund, 3 years to audit your tax return, and 10years to collect any tax due.
Is this going to be a big deal to rectify???=========>>Possibly aslongas she owed tax to IRS.in general, if you owe taxes and you do not file a tax return on time, you will incur penalties. However, if you are expecting a refund, you will not face any penalties for filing late.however, if you do not pay the taxes you owe by the tax deadline, even if you got an extension of time to file, you will incur different penalties. If you have unpaid taxes, you will owe the IRS interest in addition to any penalties. Interest rates are determined quarterly, and interest is generally compounded daily until full payment is made.
I want this taken care of before we file this years returns (I am not claiming her for 2014) because she is likely going to get a refund======>>>>>>>>>then she needs to file her return for refund; she has years to claim her tax refund. For example, her 2013 tax return is due on April 15th, 2014. Add 3 years to this filing deadline, and she has until April 15th, 2017, to file her 2013 tax return and still gets a tax refund. If she files her 2013 return after April 15th, 2017, then her refund expires. It goes away forever because the statute of limitations for claiming a refund has closed.