My Mother has always taken care of her finances until May 2015. She was told by a tax preparer that based on her income she didn't have to file a tax return. Her income currently is at $16,932. I filed for her to get the VA Aid & Assistance benefit, which will bring her income to $30,000. At that point will she have to file?
Also are there any repercussions from not filing a tax return?
Income can also be reduced by deductions, including some medical expenses of a given percentage (age dependent), as well as charitable and some other deductions.
Whether someone's income is taxable is really a matter of calculating all these figures.
Sometime ago I did some research in response to a poster's question whether VA benefits were taxable. You can read some of these responses on that subject, the first one being similar to the question you're asking.
https://www.agingcare.com/search.aspx?searchterm=VA+Aid+and+Attendance+taxable
I can't find the post I wrote, in which I cited statutory provisions, but the posts on the link I included should help.
My best recollection was that VA benefits are not taxable. See Mr. Robbins' answer in the first post in the link posted above.
Repercussions for not filing? Does the sun rise in the East? Absolutely!
Aimala, I have the impression that you haven't prepared tax returns or had someone else do them for you - no problem with that. So you might not be familiar with the mandatory nature of filing.
If you have tax obligations and don't file, and if you have income, that income is reported to the IRS, which cross checks it with filed tax returns. If it's determined that you do have taxable income and haven't filed and owe taxes, you will be contacted by the IRS.
Think in terms of failure to file as resulting in interest, penalties, possibly even intention to commit fraud ....
So don't even think about not filing. If you need guidance, e-mail the IRS with specific questions, or have a qualified, reputable tax attorney or firm prepare and file the taxes for you and/or your mother.
https://www.agingcare.com/questions/aide-and-attendance-considered-income-183969.htm