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My husband has been on disability and now regular social

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security for several years....
My husband has been on disability and now regular social security for several years. He has not filed any tax returns. He has taken money out of an investment account. Should he be filing taxes on that money? If so, can he go back and file back taxes. We are applying for a home mortgage and they are asking for tax returns. He is 68.
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Submitted: 2 months ago.Category: Tax
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9/11/2017
Tax Professional: Stephen G., Sr Income Tax Expert replied 2 months ago
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7,211
Experience: Extensive Experience with Tax, Financial & Estate Issues
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Hello, my name is***** goal is to give you a complete & accurate answer. I am working on your request now & I will respond as soon as possible.

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Customer reply replied 2 months ago
Thank you.
Customer reply replied 2 months ago
Are you still there?
Tax Professional: Stephen G., Sr Income Tax Expert replied 2 months ago

First, yes he can go back & file prior year returns.

Whether or not he (& you?) would be required to file depends upon the amount & nature of the income in his investment accounts, which would be determined by the annual 1099s from his investment or retirement (IRAs?) accounts.

Also, depending upon the amounts involved, a portion of the Social Security Disability and/or later the Social Security Retirement payments may be taxed.

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Tax Professional: Stephen G., Sr Income Tax Expert replied 2 months ago

Also, have you filed tax returns?

Do you receive your own Social Security payments?

How long have you been married?

Steve G.

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Customer reply replied 2 months ago
Is there a certain amount of income he could take from his retirement account without paying taxes on it?
Customer reply replied 2 months ago
I'm on social security and I have filed tax returns because i work part time.
Tax Professional: Stephen G., Sr Income Tax Expert replied 2 months ago

No., there isn't. It's too complicated to determine without the actual numbers.

So, have you filed using the "Married Filing Separately" filing status?

If so, your husband must also use that same filing status which means income tax for him will kick in at a much lower amount.

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Tax Professional: Stephen G., Sr Income Tax Expert replied 2 months ago

You said your husband is 68, how old are you?

Again, how long have you been married?

How many years has he gone without filing?

Steve G.

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Customer reply replied 2 months ago
He hasn't filed for about five years. We aren't married yet. We are getting married in November. What kind of penalties would he have to pay?
Tax Professional: Stephen G., Sr Income Tax Expert replied 2 months ago

OK, then he will use the "Single" filing status.

The penalties are based upon the amount of tax due, if any.

If he doesn't owe any taxes, then there's no penalty.

If he owes any taxes, the penalties would be as follows:

Failure to File, 5% a month to a maximum of 25%.

Failure to pay, 1/2 % a month to a maximum of 25%.

Failure to make estimated taxes; around 3% a year.

Interest on all of the above tax due around 3% a year also.

The bot***** *****ne, approximately an additional 50% + interest of the amount of tax due for each year.

Steve G.

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Tax Professional: Stephen G., Sr Income Tax Expert replied 2 months ago

This all presumes that he owes any income tax. He may not.

Do you know if he's received any notices from the IRS about the missing returns?

Steve G.

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Customer reply replied 2 months ago
No, I don't know if he has received any notices.
I think the best thing is to contact an accountant locally.
Thank you for your help.
Tax Professional: Stephen G., Sr Income Tax Expert replied 2 months ago

Yes, the would be an excellent idea, as if he owes any tax, an accountant (I would go to a CPA), the CPA may be able to get some or all of the penalties abated.

It will be well worth the money & will eliminate having to deal with the IRS directly.

Please remember to rate my response. --- Don't shoot the messenger :) ---

Thanks very much,

Steve G.

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Stephen G.
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