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Just do your best and as they say, "document, Document, DOCUMENT." If you're unsure of what to answer, contact the IRS either online or telephone. They're actually quite helpful. I did it. Better to be safe than sorry. Best to you!
Most of all, keep calm and look forward!
I freaked out too! n accountant has been most helpful.
First, please organize receipts and checbooks.
It's not difficult . I'm no math major and yet it is easy for me. I know the 1040 by heart. I can tell you about every line, where the loopholes are on Schedule A. and how to jump to the next line (or the prior line) on the Tax Tables.
Just don't ask me about those XYZ Tables.
What I found most difficult was just the stress of not knowing where everything was, if I even HAD everything, and what if I made a costly mistake. By looking at his old returns, I could tell if I was missing something big (I was, but I found it because I knew to look for it). I could see I was in the right ballpark. AND, as his doctor said, he was lucky to have someone pick up the ball and move it down the court. Good luck!
I don't know how this is going to play out for those on Medicaid. this could be a real tar-baby. Yes, it technically is "income" but not really in that they didn't get any real $ and the debt is from/over several years in the past.
I bet this is going to be an issue as most elderly on Medicaid have defaulted on their credit cards as all their income goes to the NH except the personal needs allowance - which has to go for that and not to credit card debt. So if they get a 1099 -C Cancellation of Debt is Medicaid going to view it as income?
I would think most on Medicaid don't file taxes so it's not about tax liability BUT rather if it somehow counts as income and throws a problem with being under 2K
for Medicaid eligibility. There's always something........
The 1099 is the "Cancellation of Debt" , which I'm sure you know.
At the local library , there was a sign-up for seniors to have their taxes done for FREE by AARP. There are retired and local public accountants and tax preparers that volunteer to do the taxes. They are familiar with dealing with senior issues!!! Also, check out the local senior center for other venues....there are a few available for free. I have been taking my parents with me because they needed to sign the forms. The first time we went I didn't have all the needed info, but they told me where to get them and rescheduled. The taxes were done and very professionally...heck....I used to pay over $200 to have mine done!!!! The taxes will be done to the best of your attempts. If there is anything missing, you know the IRS will be in touch. At least at that point you have the issue pinpointed and can hopefully deal with that. I suggest you check this out....giving yourself plenty of time to get what is needed...in other words don't wait 'til the 15Th!! This site has alot of helpful info as well. Now that I am a "senior" I have my taxes done in my own hometown sr. center (by AARP). I must add that they are very honest and diligent. Hope this helps!
and you have to recreate all as he was not sharing in his finances.....
1. Social Security Administration just sent out their 2011 - 1099 forms AND their 2012 payment schedule - this are both folded postcard kinda of paperwork. So be on the lookout for those. This you will use for income he got paid in 2011 and what he will get for 2012.
2. If he has any retirement, they too will send out the same. Federal retirement
ones are the same small postcard. Ditto for 2012 payment schedule.
3. If he has anything else that generates income, the 1099's the IRS requires companies to do are supposed to be done by 1/31/12, so they should be coming to him by the end of this week if not already sent out.This would be interest from savings accounts, his brokerage statements if he has any investments, dividend payments if he has paid up life insurance and it now generates income, etc. Most banks got this out by 1/15/12.
If he had credit cards and stopped paying for them, he might get a 1099 that is "Cancellation of Debt" - this is something new & FUN! from the credit card industry. Whatever the debt was - whether 1K or 50K - he will have to pay taxes on it as income if he get's this type of 1099.
This time of year is great as you often find out about stuff you didn't know was there OR that he has forgotten about.
NOTE: should you need to file for Medicaid in the near future you will need the 2012 payment schedule from both SSA and his retirement for the application as well as all other income/assets. So make copies of all or keep them someplace you can find them in a minute.
IRS: If you have DPOA, you can request copies of his old taxes from the IRS. I had to do this years ago in dealing with my aunt's estate - it was over the phone simple BUT not so now. Call IRS to see just exactly what they need in order to release and send copies to you. If I were you I'd get the last 5 years (2006 on) just so you don't have to get other old ones next year all in a rush for whatever. IRS is kinda s....l....o....w in getting these done, I'd allow 4 - 6 weeks for this. You still have 3 months or so and then you can always file an extension.
Now, although this isn't street legal, a lot of this type of info you can get copies of on-line from SSA, etc if you know their social and the account number and other personal information and do it as your dad. If you find you are having to deal with all then get his SS, retirement, banking etc. to on-line so you can manage it with less paperwork. If you are their DPOA it is totally OK to do this. You will want it sent to whatever is his last address they have on file for him otherwise it will be flagged. Then in a few months, change the address to what is easier for you if you need to.
I do this with my mom - we both have POB at the same address but different boxes. So very little (hopefully) goes to her old house. Good luck.
Check out Tax Tips for caregivers section to understand the tax laws and take advantage of the tax benefits that are available when supporting an elderly parent.
Hopefully this will help you with all your Tax needs.