How to File a Tax Return for a Parent

Tax season can offer a good opportunity to talk to parents about their finances. Preparing a tax return is a dreaded task for many people. So if you offer to help your parents with their return, it can be a win-win for all of you. You’ll get insight into their financial situation—which you may need if you have to care for them as they age. And your parents will get a helping hand with an unpleasant financial chore.

But what if you have to prepare a tax return for a parent because he or she is no longer able to as a result of dementia or a similar diagnosis? It’s one thing to help Mom or Dad gather documents and serve as a second set of eyes as he or she prepares a return. The process can be a lot different if you are your parent’s power of attorney and have to file a return for your parent because he or she is no longer competent to sign it. 

To avoid missteps, it’s important to understand the process. Here’s what you need to know about filing a tax return for Mom or Dad if you are a financial caregiver for your parent.

Determine if your parent has to file

Before you jump through the hoops of filling out a return for your parent, first figure out if your parent’s income meets the requirements to file a return. “Most seniors don’t reach the threshold to require the filing of tax return,” says Sharif Muhammad, a certified public accountant and owner of Unlimited Financial Services. 

• If your parent is 65 or older, he or she doesn’t have to file a return if gross income was less than $15,700 in 2023, according to the IRS. 
• If your parent is younger than 65, he or she can escape filing a return if his or her income was less than $13,850 in 2023. 

Gross income is any income that isn’t tax-exempt. Don’t include Social Security benefits when calculating gross income unless your parent is married filing separate or half of his or her Social Security benefits plus other gross income is more than $25,000. Also be aware that long-term care insurance benefits usually are excluded from income. 

You can use the Do I Need to File a Tax Return? tool at IRS.gov to determine whether your parent needs to file a return. IRS Publication 554, Tax Guide for Seniors, also has information about filing requirements.

Be aware that if your parent has high medical expenses – including long-term care costs – those expenses might offset your parent’s income enough that Mom or Dad doesn’t have to file, Muhammad says. Your parent can deduct the amount of medical expenses that exceed 7.5% of adjusted gross income. 

Determine if you can claim your parent as a dependent

You also might be able to avoid filing a tax return for your parent if you can claim that parent as a dependent. To do this, there are several tests that must be met: 

• Your parent must be a U.S. citizen, resident alien, or resident of Canada or Mexico.
• Your parent must be single (you can’t claim a married person filing a joint return).
• Your parent doesn’t have to live with you all year as long as that parent is a qualifying relative – a relative by blood, a stepparent, or father- or mother-in-law.
• Your parent’s gross income is less than $4,700 (a portion of Social Security benefits might be included as gross income).
• You provide more than half of your parent’s support for the year. Support includes the amount spent on food, lodging, clothing, medical care and other necessities.

IRS Publication 501, Dependents, Standard Deduction and Filing Information, has more details about claiming dependents. The IRS also has a Whom May I Claim as a Dependent? tool you can use to help determine whether you can claim your parent.

What you’ll need if you must file a return for a parent

If your parent must file a tax return but no longer is competent to do so, you’ll need to gather the following information to prepare the return or have it prepared by a tax professional.

• Your parent’s Social Security number
• A copy of your parent’s tax return from last year (you can get tax return transcripts at IRS.gov/Transcripts)
• Income and earnings statements, such as a 1099-R for pension income and SSA-1099 for Social Security benefits
• Interest and dividend statements from banks
• Your parent’s bank routing and account numbers for direct deposit of a refund

The tax filing deadline for 2023 tax returns is April 15, 2024.

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Before you jump through the hoops of filling out a return for your parent, first figure out if your parent’s income meets the requirements to file a return. “Most seniors don’t reach the threshold to require the filing of tax return,” says Sharif Muhammad, a certified public accountant and owner of Unlimited Financial Services. 

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Your parent’s tax situation will likely be quite different from yours. You don’t want to overlook tax breaks you’re unfamiliar with but that your parent might qualify to receive. For example, if your parent has high medical expenses—including long-term care costs—those expenses can be used to offset your parent’s income, Muhammad says. Your parent can deduct the amount of medical expenses (including health insurance and long-term care insurance premiums) that exceed 7.5% of adjusted gross income. This is an itemized deduction that must be claimed on Schedule A.

Using tax software will help ensure that you don’t miss valuable deductions and credits for your parent. You can take advantage of IRS Free File software if your parent’s income is $79,000 or less. Otherwise, H&R Block, TaxAct, TurboTax, and TaxSlayer offer tax software products.

Better yet, hire an accountant or enrolled agent to prepare your parent’s return to ensure it’s done properly. The American Institute of CPAs has a Find a CPA tool. You can find an enrolled agent—a federally licensed tax preparer—through the National Association of Enrolled Agents.

Signing a tax return for a parent

To sign a return for a parent who no longer is competent, you’ll need to be your parent’s power of attorney or court-appointed conservator or guardian. Even if you have either of these designations, you can’t simply sign your parent’s return. You must file a Form 2848 along with your parent’s Form 1040.

Form 2848 allows your parent to authorize someone to represent him or her before the IRS. As your parent’s power of attorney, you can fill out this form if your parent is unable to because of injury or illness. For a step-by-step guide, check out Instructions for Filling Out IRS Form 2848: Power of Attorney and Declaration of Representative.

The form will require you to provide your parent’s name, address and Social Security number. You’ll have to provide your name, address and CAF number. If you don’t have a CAF number (which you won’t if this is the first time filling out a Form 2848), the IRS will assign you one after you submit the form. Hang onto that number because you’ll need it when filing future returns for your parent.

You’ll need to include a reason on the form explaining why you are authorized to sign a return for your parent. According to the IRS, you should use this language: “This power of attorney is being filed pursuant to 26 CFR 1.6012-1(a) (5), which requires a power of attorney to be attached to a return if a return is signed by an agent by reason of disease or injury.” (There are other circumstances, but the disease or injury circumstance would most likely be the one you would use.)

If you don’t provide a reason, the IRS will send the form back to you requesting a reason, Muhammad says. You’ll also need to include a copy of your parent’s document appointing you power of attorney along with Form 2848 and your parent’s tax return, he says.

Your parent’s state might have its own power of attorney form you’ll need to file along with your parent’s state income tax return. To find out, search for your state’s department of revenue and the term “power of attorney.”

If you are a court-appointed conservator or guardian, you will need to file Form 56, Notice Concerning Fiduciary Relationship. This form is much more straightforward than Form 2848, but read the Instructions for Form 56 to avoid making any mistakes. You also will use this form if you need to file a return for a parent who has died.

[ Keep Reading: What to Know About Tax Deadlines for 2024 ]