My MIL decided to retire 2 yrs ago and quit her job, but hasn't been able to file for Social Security due to needing documents she does not have. She had to apply for a from from immigration, that was 28 months ago. She has been living off retirement savings for that entire time and today told me that she wasnt going to file her taxes this year because there is no need to. I told her that didnt sound right and she told me she has them taking taxes out when she gets her monthly distribution and they sent her a letter telling her she didnt need to file taxes this year. I am not sure they would even send her a letter like that. I suspect she is lying to shut down the conversation.
I used to be a tax preparer. In all of the work I did, I had exactly ONE client who had a "zero liability" return (meaning they didn't owe and didn't have a refund). Her odds are not good.
The IRS will compare the form between what the financial service place is distributing to her from her retirement account, to her tax return. However, if she only has tax free distributions, like Roth IRA, then they won't do the comparison.
However, if she has interest income (over $10 per account) or life insurance proceeds, or distribution that is taxable (which if she is having taxes taken out, then the distribution is probably taxable), then the IRS will be doing the comparison.
If she owes money to them, they will come after it, with penalties and interest. It usually takes the IRS about 2 years to figure this out. If they think the money that she owes them is minimal, they may or may not write her a letter. If they owe her money, they will NOT send her the money unless one files a tax return. Ignorance will NOT waive the penalty and interest.
Unless she lives in a no-state-income-tax state, she may owe/receive money to the state she lives in. In the state I am in, there is a food tax credit, a renters credit, etc which you can get even if all you get is food stamps. If her distribution is from a different state than where she lives, chances are there is nothing being withheld for state income taxes and she might owe taxes there.
AARP Tax-Aide is in every state and provides tax preparation for free for both federal and state. At least, she should make an appointment with them to figure this out. No reporting back to the IRS if one chooses not to file. Just say that she wants to mail in her return, if they should prepare one for her and then she can choose whether to mail in the return or not.
I understand her wanting to shut down the conversation. I also understand that some people think that there are others watching over them to help deal with the taxes (so-and-so recommended that I use this percentage so that is what I'm using.) That is not true. However, I'm worried that as she gets older, who is going to help her with her finances. Could she be in the beginning stages of dementia?
...ask her about state level taxes. In my case, my state taxes EXCEED my obligation to federal. SUCKS....
You need to get Mom to a Social Security Office. If she has worked in the US for 40 qtrs she is entiltled to the SS she paid in and now Medicare. There is a timeline to file for Medicare A and B and she should have both. B has a premium that will be taken out of her SS payment.
Mom may be entitled to Medicaid health which includes, in my State, prescriptions, dental and vision. My Mom was on PADD which was State program for prescriptions.
If she is 65 she needs to sign up for Medicare now. If she doesn't there could be a big penalty later. Your and your husband's income has nothing to do with her being able to get Medicare or Medicaid. You also need to find out why immigration is taking so long. My MIL was from England and lived here almost 70 years. She hadvan English passport and a green card and she had no problem getting SS or Medicare here.
I would think that her immigration status would be the most important place to start since this is supposedly impacting her ability to collect SS. If I were in your shoes I'd consult with an immigration attorney, even if she refuses to go with you.
If your MIL just turned 65 she is now eligible for Medicare and needs to apply through the SSA website. If she doesn't have a SSN number, this could be a problem. Do you know if she has one?
Taxable Income is anything you get a 1099 on. Thats interest on bank accts, CDs, ect. After 72 1/2 you have to defer any IRAs you have. So, money is pulled from the IRA and you pay taxes on that. If Mom is pulling from an IRA or annuity, she pays taxes on the amt she pulls.
If she has a pension, yes that is income and will need to pay taxes on it.
So you need to get her 1099s and add them up to see what income she has brought in. Check to see if taxes have been taken out. If her income does not exceed the cap, no need to file taxes. I am sure a tax preparer can give you the info. But if her income has not changed from last year and she has a letter from the IRS, she does not need to file.
If your Mom has a green card and has 10 years (40 qtrs) of SS earnings I don't see why there is a problem getting SS. If she was married, and he worked in the US she is entitled to half of what he would be receiving. I can't imagine what paperwork is needed by SS if she has a greencard and has proof of earnings. I think 28 months is a long time to get records needed. There are mexicans that live near the border that work in the US and go home to Mexico every night. They are entitled to SS when they retire if they have paid in to it.
I guess she does not receive Medicare either?
I don't think she is being honest about anything, sadly.
The last thing you want to rely on is the multiple opinions of a Forum of caregivers from around the world.
This is a simple call to a CPA regarding your mom's yearly income. You will be told whether or not you should file. In my book, if it's a question, then do it. Not something you can afford to be wrong about.
The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67."
Source: https://www.ssa.gov/pubs/EN-05-10035.pdf
"Under current Social Security rules, workers who have immigrated to the United States are likely to receive lower benefits than natives. Because Social Security requires 40 quarters of covered earnings before an individual is eligible to receive any benefits, many immigrants may not meet eligibility requirements."
Source: https://www.ssa.gov/policy/docs/ssb/v74n1/v74n1p27.html#:~:text=Under%20current%20Social%20Security%20rules,may%20not%20meet%20eligibility%20requirements.
"WE NEED PROOF OF YOUR IMMIGRATION STATUS
If you apply for SSI benefits, you must give us proof of your immigration status, such as a current DHS admission/departure Form I-94, Form I-551 or an order from an immigration judge showing withholding of removal or granting asylum.
If you have served in the U.S. Armed Forces, you may also need to give us proof of military service such as U.S. military discharge papers (DD Form 214) showing an honorable discharge.
Your local Social Security office can tell you what other types of evidence you can submit to prove your noncitizen status."
Source: https://www.ssa.gov/ssi/spotlights/spot-non-citizens.htm#:~:text=WE%20NEED%20PROOF%20OF%20YOUR,of%20removal%20or%20granting%20asylum.
I'm not very knowledgable personally in this topic but in my online searching it appears that providing immigration documentation is for the purpose of being assigned a SSN. No where can I find that the immigration paperwork is required in order to *collect* SS benefits, so my interpretation would be that she hasn't had a number this entire time... but not sure how this is possible since most financial institutions requires you provide a SSN. Is it possible she has never been a legal immigrant? Or that she has been using a purchase SSN that isn't hers?
Why are you so interested in this about her? Isn't it her issue alone? I think she is shutting down the conversation purposefully, so unless she's living in your house (and needs to pay rent) or you're supporting her in some way, I'd let it go.
It depends upon what her income level is, not whether taxes are being withheld.
My DH and I are retired. He has funds withheld from his retirement income each month too, and yes, we file our taxes yearly.