Solved: Do my parent need to start filing tax returns again?
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest second stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
New Member

Do my parent need to start filing tax returns again?

My parents are in their 80's. Because of their low income, they haven't had to file taxes since 2010. Apparently the tax person they previously used said they didn't need to file a return? 

In 2017 my parents inherited mutual funds and stock that have paid dividends. I ran the numbers with TurboTax and their returns showed owing zero to both the Federal and State of Ohio. My question is should they start filing tax returns again?

1 Best answer

Accepted Solutions
Level 3

Do my parent need to start filing tax returns again?

If your parents would be married filing jointly, and their gross income is greater than $23,300 then they would need to file a tax return.  

The IRS definition in this situation of gross income is below.  Social Security benefits are generally not included unless 1/2 of their benefits plus their other gross income and tax-exempt interest income is greater than $32,000.

If you have entered everything into TurboTax and it is telling you that their gross income is less than $23,300 then you would not need to file a return just to report dividends.

" Gross income means all income you receive in the form of money, goods, property, and services that isn't exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Don't include any social security benefits unless (a) you're married filing a separate return and you lived with your spouse at any time during 2017 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the Form 1040 instructions to figure the taxable part of social security benefits you must include in gross income."  Page 2 https://www.irs.gov/pub/irs-pdf/p501.pdf

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

2 Replies
Level 3

Do my parent need to start filing tax returns again?

If your parents would be married filing jointly, and their gross income is greater than $23,300 then they would need to file a tax return.  

The IRS definition in this situation of gross income is below.  Social Security benefits are generally not included unless 1/2 of their benefits plus their other gross income and tax-exempt interest income is greater than $32,000.

If you have entered everything into TurboTax and it is telling you that their gross income is less than $23,300 then you would not need to file a return just to report dividends.

" Gross income means all income you receive in the form of money, goods, property, and services that isn't exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Don't include any social security benefits unless (a) you're married filing a separate return and you lived with your spouse at any time during 2017 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the Form 1040 instructions to figure the taxable part of social security benefits you must include in gross income."  Page 2 https://www.irs.gov/pub/irs-pdf/p501.pdf

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

Level 15

Do my parent need to start filing tax returns again?

The inheritance, itself, is not reportable income, only the dividends or capital gains if the stocks and mutual funds are sold.
The cost basis in inherited stocks and mutual funds is the market value on the decedent's date of death
v
Privacy Settings