Helping Your Parents Do Their Taxes? Here’s How to Avoid Unhappy Returns.

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The serve of helping an honest-to-god rear or parents file their taxes can be difficult–even if you have all the necessary documents. If your rear has diminished capacity or you need to chase down information, however, you can open your rear up to unintended delays in processing refunds or fiscal consequences. Don ’ t be afraid to seek professional serve in these matters to help “ guidebook you through this minefield, ” says Henry Grzes, conduct director for tax policy and advocacy with the American Institute of CPAs. “ To navigate this on your own can be fraught with missteps. ”

here ’ s what you need to know. Determine if the taxpayer has to file a return: A unmarried person who is age 65 or older at the end of 2020 needs to file a return if his or her gross income was at least $ 14,050, according to Internal Revenue Service rules. That figure is $ 27,400 for married couples filing jointly who are both age 65 or older. One matter to keep in mind : People who normally wouldn ’ t have to file based on their income doorsill might need to file for the 2020 tax year   to be able to claim the first or second gear polish of stimulation payments, Grzes says. Gathering the background information : ideally, you ’ ll have access to copies of final year ’ south reappearance, so you ’ ll be able to see the income and deductions and replicate them for the current class, says Michael H. Karu, a certify populace accountant and partner at Levine Jacobs in Livingston, N.J. If you don ’ metric ton have end year ’ south render, you may be able to get it from your parents ’ tax preparer, with a rear ’ south license, possibly for a fee, Karu says .


Barron ’ s brings retirement plan and advice to you in a weekly wrap-up of our articles about preparing for life sentence after work. alternatively, you can go on-line to request transcripts from the IRS, though you ’ ll need certain personal information, arsenic well as access to the taxpayer ’ second e-mail and fluid phone. You can besides request copies of your parent ’ s tax account transcript ( even for multiple years ). This is available at no charge and will be sent to the taxpayer ’ s most recent mail address on file. You ’ ll need details such as the taxpayer ’ s Social Security number and birthdate to make this request.

It ’ s besides advisable to request a engage and income transcript from the IRS, which will give you all the IRS income coverage forms filed in the taxpayer ’ s Social Security number such as 1099s and W-2s for that tax year, says Or S. Pikary, a certified populace accountant and senior director at Mazars USA in Los Angeles. To do this, fill out IRS human body 2848, which gives you IRS authority to act on the taxpayer ’ second behalf. broadly, the taxpayer has to sign the phase, though there are exceptions. Signing the documents : If a rear is ineffective to sign for reasons such as decrease mental capability due to Alzheimer ’ s or dementia, a family penis may be able to sign tax-related forms and tax returns on their behalf. But you ’ ll motivation to take some extra steps to be able to do this legally, says Cameron Huddleston, syndicate finance adept at Carefull, a service that helps fiscal caregivers organize and protect their love ones ’ finances. For starters, you are going to want to make certain you submit to the IRS official copies of documents showing you ’ re the court-appointed curator or the appointed agent under a power of lawyer. be forewarned : The IRS has particular requirements in terms of what it will accept, so if you aren ’ deoxythymidine monophosphate certain, it ’ randomness best to inquire. Despite this, experts advise against signing on a rear ’ s behalf without going through proper channels. If you ’ re act as the taxpayer ’ sulfur representative under a power of lawyer, you ’ ll want to fill out IRS form 2848 and send the appropriate software documentation that shows you ’ re allowed to sign the form on the taxpayer ’ randomness behalf. If you ’ re a court-appointed defender or conservator, you ’ ll want to use IRS Form 56 and attach the relevant software documentation. When filling out either form, make certain to follow the instructions cautiously. differently, the IRS won ’ t send the tax data you ’ rhenium requesting—or procedure the parent ’ s return. On class 2848, for example, if you are seeking documents or signer authority for multiple years, make certain to specify which years, using the format spelled out in the instructions, Pikary says. People besides tend to get tripped up on Line 5a. There ’ mho a checkbox that authorizes the agent to sign the render on the person ’ sulfur behalf. But checking the box is not adequate. The instructions provide the necessary terminology the agent needs to write on the lines provided, Huddleston says. besides know that the IRS won ’ thymine accept digital signatures on this form if you file by newspaper or fax, Pikary says. States may have their own forms, thus be indisputable to check, Huddleston says.

What if the parent has died and you need to file a return on his or her behalf? As the executor of the estate, you can file the restitution on behalf of a rear. But you ’ ll motivation to file IRS Form 56 and include it with the tax tax return, says Grzes. here, excessively, be sure to read the instructions cautiously. You ’ ll besides need to send the IRS an official copy of your appointment as executor, Grzes says. “ Making a photocopy is not going to be accepted, ” he says. Write to retirement @

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