Three Questions On SS benefit!

[TAX]

Client received $5000 a year from Social securities in 2006.
No other income. Status MFJ

(1) Does client need to file tax return?

(2) Can chidren claim this client (parent) as a dependent.

(3) Does $3,300 Gross income test apply?

Thanks!

[JoshinNC]

3 answers

1) Depends, you indicated it was MFJ, so how much did the spouse earn?

2) No, because parent filed MFJ return

3) It always applies, but they didn't exceed it because SS doesn't go into the equation.

give more info and you'll get more answers

[Dervis]

3 answers

1. If the total income for both taxpayers filing MFJ is only $5,000 of SS benefits, then they do not need to file a federa return. There may be some tax benefits to filing a state return. Also, they can file 1040EZT to claim a refund of their telephone excise tax.

2. The parent can be claimed if they meet the five requirements for a qualifying relative. The main issue is likely to be one of support. Does the taxpayer provide more than 50% of support of the parent? If so, and the other 4 requirements are met, then they can claim the parent as a dependent.

3. Only taxable income is included in gross income for the GI test. Since the SS is not taxable, their gross income is zero.

[TAX]

Thank you.

I got my answer.