Two questions about taxes, on behalf of my mother

[Orrex]

1. How far back can/must you file federal income taxes?

2. Must you claim social security benefits as income?


Sorry for the dumb questions. My mom kind of blindsided me with them on a phone call this evening, and I didn't know the answers off the top of my head. I'm current on my taxes, and I don't get any social security benefits, so I don't really think about it beyond that.

Additionally, I print my own currency, so I never bother with so-called "federal" income tax returns.


Thanks for your insights.

[Xipe Totec]

1. Turbo Tax is your friend

Best investment I ever made.

On the printing currency thingie, I'll just step away and pretend I didn't hear anything.


LA-LA-LA-LA

[Orrex]

2. Thanks, but Turbo Tax won't help here

I won't be filing on her behalf; just gathering info.

And I doubt that she's sufficiently confident of her own computer-savvy to go it alone.


FWIW, I've used TaxAct for the past two years, and I've found it to be exceptionally good.

[LeftyFingerPop]

3. Hold on Orrex...

I'll see what I can find...be right back

[Orrex]

4. Excellent--thank you

It's not particularly urgent, because she's not facing an audit or anything, but she's decided that she'd like to see what she's eligible/responsible for.

[LeftyFingerPop]

5. Ok...go to this link...

http://www.irs.gov/publications/p17/ch01.html#publink100031858

Look under "Do I have to file a return"

There are certain tests that you have to meet in order to be required to file a return.

To answer your first question, she would have to go back and file a return for each year that she met those tests.

Secondly, Social Security Income is indeed counted as income for those who are required to file, HOWEVER, that income is then run through a rather complicated formula to determine how much of it is taxable.

[LeftyFingerPop]

6. Also Orrex...

The amount for the "gross income test" probably changes periodically. You would have to look up the amount for the years in question.

[Orrex]

7. Is there some "statute of limitations" or the like?

I recall that a company I worked for only had to maintain shareholder records (for tax purposes) for only seven years.

Does that apply more generally to the average individual taxpayer?


Thanks very much for the link. I'm headed there now.

[LeftyFingerPop]

8. I can't answer 100%, but knowing the IRS...

there is probably no statue of limitations. It will probably not be a problem for the years in question if no taxes were owed, but I would bet they would want their money for each year that the taxes were owed.

What I would do is research the link, come up with what you think the correct answer is for your mom, and then verify with a tax accountant before proceeding.

[Orrex]

9. Good advice--thanks again!

:hi:

[LeftyFingerPop]

10. You're welcome!! One last thing...

The reason I suggested doing the research first before seeing a tax accountant is this...they charge by the hour.

If you can present him/her with a chart or something showing your mother's gross income for each year, as well as other "test" information for each year, then the tax accountant will be able to very quickly make a determination on what years she should file.

Good luck! :hi:

[Orrex]

11. I've already gleaned some useful info from what you've provided

1. Social security benefits may or may not be wholly or partially taxable. She'll need to perform some calculations to determine what's what.

2. Eligible refunds from before 2005 have expired and are gone forever. Taxes owed from any year are owed until paid (plus fees and interest, where applicable)


She has a friend who's a lawyer and can probably help her out with some info. It looks like she'll need to speak with a tax professional of some sort, if only to iron out the details.

[LeftyFingerPop]

12. Wow...

It figures that they won't let you get a refund from before 2005, but they can go back forever to claim their taxes.

[LeftyFingerPop]

13. One last thing LOL.

even though only a portion of her Social Security benefits may be taxable, I think that you have to include the entire amount of the benefits when determining whether she should file under the "gross income test".

[WCGreen]

14. Three years back...

If social security is her main income, she will not have to file...

However, she should file this year in order to be considered for that government check...

Basically, if you earn less than the combined exemption you qualify for and the deduction you qualify for, you do not have to file unless you had tax withheld...

I do taxes for a living...