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Do I need to file a tax return (for my aunt)?

My aunt is 92 and has been in a nursing home for 10 years; her only income is a GM pension and SS. She has not had any taxable income for many years, but has had to file because there was withholding on her pension that she had to recover.

This year is different in three respects.

1) There is no withholding. Don't know why, but there isn't. 2) Her W2 (don't have any idea why GM issues a W2 for $79, but they do) shows $6 in unpaid SS tax 3) She gets a $5 retirement credit

Taxcut says she owes $1. Are there any consequences to just ignoring the whole stupid thing?

Reply to
Toller
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Unless the taxable amount on her pension plus the $79 is more than $10750 filing is not required.

The $79 is for a benefit (probably for legal or some other type of insurance) that is part of her retirement package. Presumably the $5 is on the W-2

Reply to
Avrum Lapin

Yes, the W2 is for insurance of some sort. The pension was $12,000, but she had $23,000 in medical, so no tax. What are the consequences of not filing? They can't really do anything to her as she has no assets and the medicare takes her entire income to pay the nursing home. It just seems silly.

Reply to
Toller

A 12,000 pension plus $6 in uncollected FICA & Medicare tax for the deemed cost of her group legal services plan, place her above the threshold for filing.

So she should file, and even if her medical costs reduce her taxable income to zero, the uncollected tax of $6 will still be due.

Will the IRS come after her if she doesn't? Not very likely, but it is bad manners to come to a tax professionals newsgroup and ask if it's OK to break the law it the chances of getting caught are low.

Reply to
Arthur Kamlet

Why not just file and get ride of the obligation? That way, nothing will come back to bite in future years.

Reply to
parrisbraeside

I will file, though it seems like a waste of paper, postage and the IRS's time. As a practical matter she won't be alive in future years.

Reply to
Toller

Toller wrote: ...

As a practical matter, if has been filing, the likelihood of creating a waste of IRS time would probably be in not filing rather than doing so, particularly if use e-file...

Reply to
dpb

That's precisely why a tax return should be filed! ;-)

Actually, the real reason is that a return is required because income is over the threshold, even if it results in little to no tax. A good reason for filing a "borderline required" is to start the period of limitations so the IRS can't come back (more than 3 years) later and say, "where's the return?"

So, do you want to deal with her mess now or later? Later, it will be harder to deal with.

Reply to
D. Stussy

6.2% tax credit on earned income for 2009, which wipes out the Social Security tax, leaving only the 1.4% Medicare Tax.

The $79 earned income would be imputed income for a taxable benefit, like Life Insurance over $50,000.

Even though deductions and exemptions wipe out all taxable income, the Social Security and Medicare Taxes are on gross wages. Bottom line is that your aunt owes $1.

Reply to
Stan K

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