There may come a time when your parent needs you to care for them as much as you once needed them to take care of you. This might involve helping them navigate daily tasks or tending to their finances if they become incapacitated or mentally incompetent and can't do so themselves. And if you’re taking care of a parent’s finances, you may also need to file a tax return on their behalf.
- You can prepare your parent’s tax return yourself or hire a professional to do so on their behalf, but in order to sign it and file, you’ll usually need to get IRS power of attorney, which means your parent will likely have to fill out Form 2848.
- You can be authorized to talk to the IRS on your parent’s behalf by checking a box and providing your identifying information on their tax return.
- Your parent might not need to file a tax return, depending on their income and other circumstances.
Can You File a Tax Return for a Parent?
You can file a tax return for one of your parents if they have given you IRS power of attorney by filling out Form 2848 or if you are their conservator. When a parent decides to give you IRS power of attorney, they can limit what you are allowed to do. For example, they may only permit you to sign and file the return, but not do anything else they would normally do.
Requirements for Filing Someone Else’s Return
You’ll need authorization to sign and file your parent’s tax return. The IRS recognizes a few types of third-party authorizations.
Power of Attorney
An IRS power of attorney allows you to sign your parent’s tax return for them, as well as negotiate and argue issues with the agency on their behalf.
To give you permission to sign the return, you and your parent will need to submit Form 2848, also known as the Power of Attorney and Declaration of Representative. Be sure to enter the letter "f" for "family member" in the designation column in Part II and check the "Sign a return" checkbox in Part I, Box 5. The form must be filed with the IRS and should be included with the tax return as well.
Your parent can limit the power of attorney permission and only allow you to perform specific cited tasks such as signing the return, or they can give you authorization to do anything on their behalf with the exception of signing a check.
You can submit Form 2848 by mail or fax. You can also check a box on the form to request that the IRS send you copies of all letters, communications, and notices regarding your parent. The power of attorney remains in effect until it is revoked by you or your parent.
If your parent is not mentally capable, they will not be legally permitted to sign and date any legal forms, including Form 2848. But you may have another option.
If You Have Conservatorship
Submitting Form 2848 shouldn’t be necessary if you have been assigned as a conservator over your parent by a court.
“As part of the conservatorship, [the child] should have filed Form 56 with the IRS to inform the agency of their fiduciary relationship with their parent,” Logan Allec, CPA and owner of Choice Tax Relief in Santa Clarita, California, told The Balance. “If a child does have an approved conservatorship and has filed Form 56 with the IRS, they can sign their own name on their parent's Form 1040 in the box where their parent would usually sign. They do not have to file a Form 2848.”
Your parent also can give you permission to communicate with the IRS on their behalf by completing the Third-Party Designee section of their tax return. That involves checking a box and providing your name, which is why this option is often referred to as “checkbox authority.”
However, that’s all this option authorizes. It doesn’t allow you to sign the return for an incompetent parent. This authorization expires one year after the due date for the tax return.
It can be a good idea to be added as a third-party designee in addition to filing Form 2848 so you can be sure the IRS will reach out to you if there’s a problem with the return. It also allows you to provide information to the IRS that might be missing from your parent’s return.
Tax Information Authorization
This authorization allows you to receive and review your parent’s tax information from previous returns, which you might need to accurately prepare a current year’s tax return. It doesn’t permit you to sign their tax return on their behalf. You can complete the authorization in a Tax Pro account or file Form 8821 by mail or fax. This authorization stays in effect until your parent revokes it.
Tax Information Authorization can be used to authorize third parties such as lenders or other agencies to access tax records in order to approve a loan or perform a background check.
The IRS can offer help if you find yourself feeling challenged by these options and how to get them right. The Tax Counseling for the Elderly (TCE) program is available if your parent is age 60 or older. TCE is manned by volunteers who provide free help in preparing tax returns from Jan. 1 through April 15 each year, assuming your parent is mobile enough and cognizant enough to meet with a representative.
The IRS also offers the Volunteer Income Tax Assistance (VITA) program specifically designed to help taxpayers with disabilities. Your parent will also qualify if they have income of $58,000 or less for the year or if English is their second language.
Can You Claim Your Parent as a Dependent?
You might be able to claim your parent as a dependent even if they don’t live with you. However, you must pay for more than half their total support for the year. For the 2021 tax year, they cannot have a gross income of $4,300 or more.
Your parent may still need to file a tax return even if you can claim them as your dependent. Whether they need to file a tax return depends on their earned and unearned income. The tax filing requirement is also based on whether your parent has reached age 65, is married, or is blind. Assuming your parent is single and age 65 or older, they typically would only need to file a tax return as your dependent if their unearned income was more than $2,800 in 2021.
The Bottom Line
The simplest and most efficient way to prepare, sign, and file your parent’s tax return if you don't have conservatorship is to submit Form 2848 with the IRS. Seek help from the Taxpayer Advocate Service or a tax professional if your parent can't sign the form and you don't have conservatorship. A tax professional may also be able to help you claim your parent as a dependent, which can help you lower your overall tax bill.
Frequently Asked Questions (FAQs)
At what age does a taxpayer no longer have to file a return?
Tax filing requirements aren’t based on age; they're based on income. Your parent doesn’t have to file if they have less income than the amount of the standard deduction they’re entitled to for their filing status. But taxpayers age 65 or older are entitled to an extra standard deduction. Single taxpayers age 65 and older only need to file a tax return for the 2022 tax year if their gross income was more than $14,700.
What is the elderly tax credit?
The Tax Credit for the Elderly or the Disabled is available to taxpayers age 65 or older, or those who are younger but permanently and totally disabled and have taxable disability income. Income limits apply. The credit is worth up to $7,500 for the 2021 tax year. You can use this IRS tool to check and see if you or your parents qualify.
What forms do you need to file taxes for someone?
You can file IRS Form 2848 for power of attorney authorization to sign and file someone else’s tax return. Form 8821 allows you to receive and review your parent's tax returns from previous years.
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