Mom lives in AlF due to dementia. We pay $36,000 for her care, about $2500 out of pocket expenses for drugs ect., and $3,400 in property taxes for her vacant home. Last year 2014 I cashed in her last annuity for $45,000, Added to her SS her total income was around $65,000. Do I need to file income taxes for her? I did not file for 2013 because her income was $45,000 total (SS plus annuity ) And her expenses that year were about the same except she still some money left in savings, now she does not.

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Sounds like there is not enough money to upgrade and repair the house for sale anyhow.

When will you find out if she qualifies for VA Aid and Dependent's Aid? I hope she gets it.

That is a nice property tax break for people so no longer owe any money on their home. My house is only worth $160,000 and we pay $1,700 in property tax. We have 15 years left to completely pay for our house.

Since you just sold her last annuity and her savings are all gone, where will the money for future property tax bills and basic upkeep on the house come from?

I wish you well in your journey.
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Actually the house/property is only worth about $245,000. Property taxes where she lives would be $4,000 but she qualifies for homestead tax credit for owning her home with no mortgage. The house is in need of many upgrades and repairs (nearly $85,000 at least) and a business that buys homes offered $125,000 cash for it. VA does not include the house when considering Aid and Dependance benifits which she should qualify for. If we sell the house she looses the VA benefit. People live long in her family, into their 90's and she is 85 now. It will help us to keep the house still and pay the taxes on it and still get the benefits. Otherwise if we sold the house we will have $3500+ monthly expenses on only $1500 SS leaving her with only about 60 months of money to pay the shortfall.
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$65,000 total income from annuity and social security

-$ 2,500 (these have to be medical expenses like prescription drugs, etc.)

-$ 6,200 standard deduction for 2014
$20,300 appears to be taxable at $907.50 plus 15% of the excess over $9,075 which is this case would be 15% of $11,225 = $1,683.75 which added to $907.50
is a tax bill of $2,591.25.

I used information from the site below in figuring up the federal taxes.


I'm not a CPA, but it does look like your mother owes federal and state taxes this year.

In subtracting her income in 2013 of $45,000 minus the cost of ALF $36,000, minus out of pocket medical expenses of $2,500 minus the standard deduction for 2013 which was $6,100 leave $400 which was taxable at 10% which was $40.

That must be one valuable piece of property and a nice house to be paying $3,400 in property taxes. That is double the amount that I pay in property taxes for my house.

With that being her last annuity and having to pay $35,000 for her ALF care, it sounds like you will soon need some extra income which may necessitate the sell of that house to help pay for the ALF costs.
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