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My mother is 85 and lives in an assisted living community. It costs $5,500 a month. She has a pension of about $40,000 a year and a slowly dwindling IRA (about $5,000 left) so I pay the shortfall. She has no savings left. It all went to her care. I pay her Medicare bill and the bills for her house which I hope to fix up and rent.


Since taking over her care I’ve filed her taxes every year but this year I just don’t want to. It seems unfair that she always ends up getting about $685 in a federal return which I then end up paying to the state. Funny how it always works out like that. So I’m wondering what will happen if I just don’t bother? The woman is 85 and basically has nothing. She worked her entire life, always paid her taxes and now at the end she STILL has to file? I know the rules around this and how it came to be (thanks Ronald Reagan), but I’m wondering what’s the worst that could happen if I just don’t bother.

I think we all need a new category. The Sandwich Generation
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Reply to Pandabear
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You should talk to a CPA. Yes, her taxes need to be filed. Why are you funding some of her needs? She should have received a form 1099 which indicates the reason why she has to file income taxes.
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Reply to Llamalover47
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I live in Canada & we file provincial & federal taxes together - when I filed for mom usually all I paid was $300-400 to the province for her annual medical insurance

Makes me happy to be on the right side of the border - thanks for the reminder
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Reply to moecam
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Did either parent serve in the military during a war? There is a little known benefit for veterans called Aid and Attendence that may provide some assistance. It was designed to help pay for skilled care in home or a facility for veterans or spouses who served at least one day while the US was at war.
You have to meet certain financial criteria but it's worth checking out. A councilor at A Place For Mom told me about it.
https://www.veteranaid.org/
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Reply to Frances73
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As usual advice without the important questions asked...do you have POA and is it in effect?

If yes, you would be in violation of fiduciary responsibility, could be brought up on criminal charges and personally responsible financially. A lien would be the least of your worries.

As for the fixing up the home to rent out. Does not make any sense. Your talking about renting out a home at a loss every year.
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Reply to tacy022
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You do know you’re allowed to deduct a percentage of her fees paid for assisted living right? Also, her Medicare part B premiums and her Medicare supplement insurance premiums. And anything like her meds and incontinence supplies etc. all of this would be under medical and likely be over the percentage allowed for medical deductions.
If you don’t file her taxes that’s called tax Evasion so you don’t want to go there...and why would you let the government keep her money owed to her. She deserves to have that back. So what if part goes to the state? I wonder if you are missing some deductions..so you might want a professional take a look at them.
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Reply to Harpcat
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The state can put a lien on her house, foreclose on it and take it from you legally. Don't skip on doing her taxes; its not worth losing her house over it.
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Reply to mmcmahon12000
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You would likely benefit from a consultation with an attorney who specializes in Elder Law. They should be able to answer your tax questions as well as help you with the real estate and Medicaid qualification. Most reputable ones will have a free initial consultation where they will describe your options and their fees.
You may find that she can keep her home and qualify for Medicaid. Hopefully, that would make up the shortfall that you are now covering for her. Medicaid and taxes are different in different states, and you really can't rely on information you get from people like us online.
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Reply to Agingmyself
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Isthisrealyreal Feb 20, 2019
Medicaid doesn't pay for Assisted Living and this lady makes quite a bit more then the max allowed.

Medicaid is probably not in her future.
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Definitely file the taxes. My husband is POA for his brother who's in a NH and we have been doing his taxes for 3 years now. He has SS and 2 small pensions, plus he's spending down his IRA. On paper, is income looks "high," but becasue of the very high medical costs, he ends up getting back both state and federal taxes that were witheld from his little pensions. Even with the new tax law, his medical deduction far exceeds his income. Assited living may be differnt than NH n terms of taxes, but at least part of it might be a medical deuction.
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Reply to newbiewife
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I can't urge this enough. The new tax law is going to give some shockers. Wait until this sorts out. Many things previously deductible are no longer so. Talk to a CPA.
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Reply to Segoline
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MACinCT: No, I don't claim her as a dependent. I feel like she's not really a true dependent since she has a pension to take care of her. True, it's not enough, but it's there. She does not receive social security. She never worked under the system. She taught for 32 years, all under a pension system.

I'm very curious about the 45% deduction for memory care...
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Reply to Tjlang34
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worriedinCali Feb 17, 2019
The IRS would never allow you to claim her as a dependent anyway because her income is too high. Her gross income has to be less than $4,050
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I go to an accountant for my mom. Do you know that there is a tax deduction of around 45% for being in memory care.? Mom owes nothing, just the cost of the accountant
Are you claiming her as a dependant? Pay attention to what others are saying about the house. Sell it and use it for her care
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worriedinCali Feb 17, 2019
why Would she claim mom as a dependent? Shes not her dependent, she lives in AL and has a $40k a year pension. Not only does she make too much to be considered a dependent but she does not live with the OP which also makes her ineligible
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Yes, you have to file. Moms pension is taxable and so is her SS because of her pension. Until the IRS tells you different, you need to file.
My Moms income was about 20k. 17k of that was SS. The rest was a sm pension. IRS sent her a letter saying she no longer need to file taxes.
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Reply to JoAnn29
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If she could live a long time, she could get audited and end up paying fines and penalties for not filing, I would do it only because she usually owes the state. If she never had to pay anything, no big deal. They will be looking for the ounce of flesh from your mom. Actually it is a big deal if she has assets, you don't want them taking anything from her. She makes more than the allowed amount for not filing. And there are major tax changes for 2018 that can change everything. You can't fight the IRS so it is easier to comply.

I would check the requirements for Medicaid for your state, 40k annual pension most likely stops her from getting Medicaid. Check what you can do to get her qualified. My dad only gets 27k and he makes to much for assistance. We could have spent thousands for a Miller Trust but he didn't have any extra to cover the attorneys fees.

I think keeping the house to create income is a great idea, maybe you will get enough ROI to cover her monthly expenses.

Good job, keep it up! Your mom is very blessed to have you advocating for her.
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Reply to Isthisrealyreal
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Yeah to shower Tuesday. It's everyone's enemy. You are a good kid and trying to do right thing for your mom.

The house is always a thing. She has attachment. You have one too. That's understandable. But don't let it preclude your judgement and make you a prisoner of the memory, ok?

My mom was an educator too. Got doctorate and went on to be an educator at the college level. Widow since 48. 93 now. She, over course of her life, owned 10 houses, in 3 different states. Don't get me started on that.

We want the best for YOU.
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Reply to Segoline
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Lol! Yes, I’m grateful that she’s happy and tends to behave. With the exception of Shower Tuesday. Everyone’s her enemy on Shower Tuesdays.

It’s funny you mention the lack of racial diversity. That’s the case now. My mom is the only Black person in the place. I’ve been told this is common at private pay facilities due to the high cost. It hasn’t been an issue since the staff is highly diverse but I’ve heard stories of issues.

Anyway, besides the poor care of the Medicaid places, I’ll admit to being reluctant about getting rid of the house which I assume I’d have to do to make her Medicaid eligible. It’s my childhood home. Plus I know how hard she worked to buy that house. It was quite a feat for a single mom on a teacher’s salary.
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Reply to Tjlang34
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In all seriousness, let me give you something to consider. Are there places within an hour's drive which accept Medicaid and are not the 3d circle of hell?

If you've got soon to be college age kids, you need to be thinking about your own retirement too.

And it comes at you faster than you can imagine. Yes you are sandwich gen.

Our mom is in a MC facility 30 miles from where we live in a metro area. Our elder law guardianship attorney told us about it. And we could not have made a better decision than to place her there. She will be private pay until she exhausts those resources and then go on Medicaid there.

It is actually one of two certified MC facilities in the state. Not part of CCRC.

I Am not real sure how to put this. It is not racially diverse at all. It is not a huge behemoth of a place. 6 neighborhoods of 12 neighbors. Each room is private as is bath.
Our mom is in a neighborhood of higher functioning peeps.

She was in a geriatric behavioral hospital in same town before she was placed there. Because we needed advanced testing beyond an hour. We got it, too. Our attorneys were fabulous in letting us know about both facilities.
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Reply to Segoline
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No adjudication, just the diagnosis. Cognitive Dementia. She lives in her own fantasy land, which I’m kind of happy about. She’s doing really well. The place she’s in is private pay only plus I’d hate to move her. The Medicaid places around here tend to be the third circle of hell. It makes me so angry and sad.

Unfortunately I’m not wealthy but I have a good job and an apartment building so it all works for now. I’m four years from the first child heading to college and six years until the other. That will definitely complicate things. I’m a perfect example of the sandwich generation.
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Segoline Feb 17, 2019
so you have a nice one with dementia?? The unicorn has been found!!

Kidding Op. Most of ours are beasts.
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Ok, so she does have a dementia dx? Has she been adjudicated as not competent?

Is there some reason you don't want to apply for Medicaid?

I Take it you are very wealthy to be able to shoulder this expense.
No snark meant in that. I don't understand why you are paying the shortfall if her finances are dwindling.
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Reply to Segoline
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It makes more sense to rent out the house to create a perpetual stream of income versus selling it and running through the money in perhaps 2 and half years. Physically she’s in excellent health. If it weren’t for the dementia she’d still live in her home. People in our family tend to live well into their nineties so I’m preparing to pay for her care for at least 10 more years.
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Reply to Tjlang34
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Weelll, they could put a levy on the house, among other things.

Why don't you sell the house?
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Reply to Segoline
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