Can I put my mother on my taxes since I've been caring for her? She only gets like $1000 a month in SS and 70$ in a pension. I pay her household bills with her checks. I'm POA and sometimes I use her checks for grocies and sometimes I pay grocies. She doesn't file taxes since her pension ends up being only @800 a year, but this year we had to take out her CDs to pay for skilled care after Medicare stopped at 25 days (I did appeal won one, but lost the next) . So would I be able to put her on my taxes?
CDs you pay taxes on the interest yearly. With her income she probably has been told that she no longer pays taxes. CDs don't yield all that much interest anymore so you are probably safe there.
IRAs are deferred. Meaning no taxes are paid until the IRA is cashed in. This is where income tax will need to be paid.
I think this is how it works. With claiming as a dependent, you have to be paying over 50% for her care. So say it cost 10k a year to care for her, You have to be paying over 5k of the 10k. But like said her income maybe too high anyway. This is really a question for a tax preparer or a CPA.
JoAnn it depends on what type of IRA, not all are taxable.