Not everyone has what it takes to finish a tax return. The federal tax code included around 4 million words as of 2013; they are intricate and difficult to understand [source: Erb]. It should come as no surprise that over 60% of American taxpayers use specialists to complete their tax returns on their behalf [source: Ohlheiser].
However, it is completely legal for some people to simply ask friends or family members for assistance. You are completely permitted to assume the burden of filing someone else’s taxes with their consent. However, you and the beneficiary of your generosity should be aware that the ultimate liability for any errors rests with the taxpayer, not the preparer. If you make a mistake, the person whose taxes you prepared is responsible for paying any back taxes, penalties, or interest.
In this guide, we find out: Can You File Taxes For Someone Else, signing tax return for incapacitated person, can i file taxes for someone else using turbotax, and filing taxes with power of attorney.
Can You File Taxes For Someone Else
If you spent the time to prepare someone else’s taxes, you might desire the flexibility to talk to the Internal Revenue Service about your work. You can be included by the taxpayer in the space labeled “Third Party Designee” on the return, immediately above the signature field. This enables the IRS to speak with you about the return. The discussion is restricted to matters including incomplete information and the preparation, processing, and status of returns [source: IRS].
You probably won’t be able to assist if you truly screw up and the tax return you so meticulously prepared is audited. You cannot be designated as a representative because only an authorized representative is allowed to assist the taxpayer during an audit. Only a select group of professionals, such as enrolled agents, certified public accountants, and attorneys, are recognized by the IRS for this job. The tax preparer must pass an IRS test or have previously worked for the IRS in order to be accepted into this last group.
There are other motivations for completing another person’s tax return besides just lending a hand to a buddy in need. Depending on the amount received, your dependent kid who receives income from a job or investments may need to submit a tax return. In certain cases, parents are in charge of filing their child’s return if the latter is unable to comprehend the procedure. She might be qualified for a refund even if her salary falls below the annual minimum.
When someone passes away, a new tax issue involving the family could appear. Even if taxes still need to be filed, the executor or estate administrator is usually in charge of doing so. However, if no overseer was designated, a survivor must take charge. If that applies to you, you must file your tax return for the year your relative passed away as well as any prior years for which they neglected to do so [source: TurboTax]. Finding all the necessary documents may be a challenging task, depending on the deceased’s degree of organization and your relationship with them.
Work carefully if you think you’ve understood the tax code enough to assist a friend in need. Avoid putting your friend on a collision path with the IRS.
signing tax return for incapacitated person
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.
Note
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.”
Third-Party Designee
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.
Note
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.
Note
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.
Other Options
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.
can i file taxes for someone else using turbotax
Newest Queries
I can still remember my dad every April, receipts and paperwork spread out everywhere, moaning and groaning about the pains of being a small business owner and tax season. Tax season, it seemed (and now I know to be true) can be a complicated mess for many people, in all kinds of careers and financial situations.
Of course, today there are a variety of businesses and individuals, including online platforms, that are available to the consumer in need of some tax-return help. However, most resources do come with a cost. And depending on one’s revenue streams and investments, some returns require more help and more work than a free online resource offers. So, what does one do when they need help? Who can sign a tax return? Is filing taxes for someone else wrong?
Rules About Tax Return Preparation
With a taxpayer’s permission, anyone can take on the responsibility of filing someone else’s taxes. While this freedom is so helpful to so many, there are a few important considerations for both the taxpayer and the voluntary preparer.
Rules of Responsibility
One of the most important rules to remember about assistance with tax preparation is the question of responsibility. In a situation where help is offered and utilized, the responsibility for any mistakes made will always lie on the taxpayer. This is important for both parties to remember, whether you are the trusted advisor or the responsible decision-maker (and taxpayer). Any mistake made is going to hurt the friend who trusted the preparer, potentially causing financial strife and/or relational issues.
Third Party Designee
When assistance occurs, it is best to list the person who helps in the “Third Party Designee” area on the tax return. This area is located just above the area on the return that needs to be signed by the taxpayer. This designation gives the Internal Revenue Service (IRS) permission to speak with the preparer about the return. Unfortunately, these conversations between the preparer and the IRS are pretty limited. In the case of a significant mess up or an audit, the designee likely will not be able to help, even though they prepared the return.
Authorized Representatives
Regardless of who prepares the tax return, there are rules related to who can help in the event of a large mistake or an audit. In this situation, only authorized personnel are allowed to be a “representative” of the taxpayer. Authorized personnel is approved by the IRS (after completion and acceptance of Form 2848); this list of personnel includes attorneys, law firms, CPA’s and enrolled agents. Any of these persons have full power to represent the taxpayer.
Enrolled Agents
In some cases, a voluntary tax preparer may be able to represent the taxpayer. One may become an enrolled agent (a tax professional authorized by the US government) by passing a three part test that is administered by the IRS or if they have prior experience as an IRS employee. Applicants must also pass a background check. These agents are considered elite status and hold one of the highest credentials given by the IRS.
Family-Related Tax Preparation Considerations
There are situations where a family member may have no choice but to help prepare someone else’s tax return. In these situations, the question of “who can sign a tax return?” actually has a different answer. Parents are responsible for the tax returns of their working dependent children. In the event of a family death and no designated executor of the estate, a survivor will have to handle the tax return for the deceased.
Additional (Free) Tax Preparation Options
If the idea of filing taxes for someone else feels a little messy, there are a few different free options for most taxpayers. Eligibility for the different resources often depends on level of income.
Volunteer Income Tax Assistance
Currently, the IRS sponsors a free taxpayer assistance program, Volunteer Income Tax Assistance (VITA), for qualified taxpayers. There are eligibility requirements for the program, including an income level of <$56,000 and/or disability or limited English-speaking capabilities. The IRS offers this online locator tool for locating VITA help. For candidates who do not need complete assistance, there is also a “Self-Prep” option, in which the taxpayer does some of the work of preparing and filing with help from an IRS volunteer.
Tax Counseling for the Elderly
The IRS also sponsors a volunteer program, Tax Counseling for the Elderly (TCE), which offers free tax preparation for eligible candidates. TCE typically works with candidates 60 years and older. They offer extensive knowledge related to pensions, social security and other retirement benefits.
Commercial Tax Preparation Software(s)
There are a variety of online platforms, including TurboTax, TaxAct and H&R Block that offer free tax services. While these options are extremely helpful to many, the free options only work for basic tax returns. Many users often run into some hidden fees or find that their return is not basic – and therefore, not free.
IRS Free File
Free File is a partnership between the IRS and some commercial tax preparation software companies. Eligibility for this free help depends on level of income. Taxpayers who need to pay a state tax return will also not be able to prepare that with Free File.
So Who Should Do My Taxes?
If you are able, the best tax preparer is yourself or an authorized professional. In both of these circumstances, the issue of responsibility for mistakes is less ambiguous than it would be should you use a friend or colleague. However, tax preparation and filing is a complicated process, and there is no question that everyone would like to ensure that they get their full refund. Luckily, there are a variety of resources available to taxpayers today, both paid and free, which are perfectly legal to utilize. This includes the help of a friend or colleague; just be careful to clearly define your working relationship with each other before moving forward.
filing taxes with power of attorney
To protect your privacy, IRS employees won’t talk to just anyone about your taxes. To give them permission to discuss your taxes with someone else, you’ll need Form 2848.
Giving permission
You may have heard the term “power of attorney” in the context of giving someone the legal right to make medical or financial decisions on your behalf. Using Form 2848, Power of Attorney and Declaration of Representative, doesn’t grant the IRS such broad powers. It only authorizes another individual to deal with the IRS for you. This can include:
When do you need Form 2848?
Not just anyone can be granted power of attorney with the IRS. While you can authorize immediate family members to act on your behalf, this form is most often used to authorize a tax professional to deal with the IRS for you. This includes:
There are several reasons you might want to appoint an IRS power of attorney. For example,
You can list up to three representatives on the form. By checking a box under the person’s name, you can authorize the IRS to send copies of any confidential tax information to them. This includes copies of tax return transcripts and IRS notices.
Form 2848 also allows you to define the scope of authority you wish to give your representative, depending on how you fill out line 3 in Part I. When completing this section, you need to provide the specific issue(s), the types of forms involved and the year(s) to which this authority applies.
For example, if you want to allow an enrolled agent to discuss your 2019 Form 1040 income tax return with the IRS, you will enter Income, Form 1040 and 2019 on line 3. By limiting their scope of authority, you ensure that the representative can’t discuss other types of tax returns or other tax years without your authorization.
Make sure you don’t leave line 3 blank. If you do or if you use general terms like “all taxes” or “all years” in this section, the IRS will reject your power of attorney request.
Where to file an IRS power of attorney
After you’ve finished filling out Form 2848, you (and your spouse, if you’re married) need to sign it and get a signature from your representative. Then it’s time to send it to the IRS.
If you’re already working with an IRS representative, they may request that you fax the form to a certain number. Otherwise, you’ll need to mail or fax it to the IRS. That mailing address or fax number depends on the state in which you live. You can find the address and fax number for your state in the ‘Where to File Chart’ included with the IRS Instructions for Form 2848.
An IRS power of attorney stays in effect for seven years, or until you or your representative rescinds it. To revoke an IRS power of attorney, you either file a new form naming someone else as power of attorney or write “REVOKE” across the top of the first page. Then sign and date below the annotation and mail the form to the address listed in the instructions.
TurboTax has you covered
If you need help dealing with an IRS notice, you don’t have to handle it on your own. If you used TurboTax to prepare your tax return, visit the TurboTax Audit Support Center for help figuring out what type of notice you received and how to respond to it.
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