There may come a day when your mother needs you to care for her just as much as you needed her to care for you. This may include assisting her with daily tasks or managing her finances if she becomes unable to do so herself. And if you are managing your father’s finances, you may also need to file a tax return on her behalf.
Can you file a tax return on behalf of your parents?
You can file a tax return on behalf of one of your parents if your parent grants you tax authority by completing Form 2848 or if you are their guardian. When a parent decides to grant you tax authority, they can specify what you are allowed to do. For example, they may allow you only to sign and submit the return, but not to do anything else they would typically do.
Requirements for filing a tax return on behalf of someone else
You will need authorization to sign and submit your parent’s tax return. The IRS recognizes certain types of authorization from third parties.
Tax Agency
The IRS allows you to sign your parent’s tax return on their behalf, as well as negotiate and discuss issues with the agency on their behalf.
If you have guardianship
If you have been appointed as your parent’s guardian by the court, it will not be necessary to file Form 2848. “As part of the guardianship, the child must file Form 56 with the tax agency to inform the agency of their agency relationship with their parent,” according to Logan Alik, an accountant and owner of Choice Tax Relief in Santa Clarita, California. “If the child has a certified guardianship and has filed Form 56 with the tax agency, they can sign their name on their parent’s Form 1040 in the box where their parent usually signs. They do not need to file Form 2848.”
Third-party designee
Your parent can also give you permission to communicate with the tax agency on their behalf by completing the third-party designee section on their tax return. This involves checking a box and providing your name, which is why this option is often referred to as “the choice authority.”
Other options
The tax agency can provide assistance if you find it challenging to navigate these options and how to implement them correctly. The Tax Counseling for the Elderly (TCE) program is available if your parent is 60 years or older. TCE is run by volunteers who provide free assistance with tax return preparation from January 1 to April 15 each year, provided that your parent is mobile enough and has sufficient knowledge to meet with a representative.
The tax agency also offers the Volunteer Income Tax Assistance (VITA) program specifically designed to assist taxpayers with disabilities. Your parent will also qualify if they have an income of less than $58,000 per year or if English is their second language.
Can you claim your parent as a dependent?
You may be able to claim your parent as a dependent even if they do not live with you. However, you must provide more than half of their total support for the year. For the year 2021, they cannot have a gross income of more than $4,300.
Your parent may still need to file a tax return even if you can claim them as a dependent. Whether they need to file a tax return depends on their earned and unearned income. The filing requirements also depend on whether your parent has turned 65, is married, or is blind. Provided that your parent is single and 65 years or older, they typically will not need to file a tax return as your dependent unless their unearned income is more than $2,800 in 2021.
Conclusion
The simplest
The most effective way to prepare, sign, and file your parent’s tax return if you do not have guardianship is to submit Form 2848 with the tax agency. Seek assistance from the Taxpayer Advocate Service or a tax professional if your parent is unable to sign the form and you do not have guardianship. A tax professional may also be able to help you claim your parent as a dependent, which can help reduce your overall tax bill.
Frequently Asked Questions (FAQs)
At what age does a taxpayer not need to file a tax return?
Filing requirements for a tax return are not based on age; they are based on income. Your parent does not need to file a tax return if their income is below the standard deduction amount they qualify for based on their tax status. However, taxpayers over the age of 65 are entitled to an additional standard deduction. Individual taxpayers over 65 only need to file a tax return for 2022 if their gross income exceeds $14,700.
What is the tax credit for the elderly?
The tax credit for the elderly or disabled is available to taxpayers over the age of 65, or those who are younger and are permanently and totally disabled and have taxable income below certain limits. Income limits apply. The credit is up to $7,500 for 2021. You can use this IRS tool to check if you or your parent qualifies for it.
What forms do you need to file a tax return on behalf of someone else?
You can file Form 2848 with the tax agency to obtain a power of attorney to sign and file a tax return for someone else. Form 8821 allows you to receive and review your parent’s prior tax returns.
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Source: https://www.thebalancemoney.com/how-to-file-tax-returns-for-an-incapacitated-parent-6281213
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