Are there tax implications for a guardianship?

Yes, there can be tax implications for a guardianship in Virginia. A guardian is responsible for the care of a minor or an incapacitated individual, and the guardian is the one who will file and pay taxes on the ward’s behalf. As a guardian, it is important to retain any and all receipts for expenses made on behalf of the ward. These receipts can be used to claim any eligible deductions for the ward’s taxes. It is also important to keep in mind any special tax credits or deductions that may be applicable to the ward, such as those for medical expenses or special education costs. The guardian should also make sure to file any applicable returns on behalf of the ward. Depending on the ward’s income level, the guardian may need to file a federal return and any applicable state returns. If the ward has unearned income, such as interest or dividends, the guardian may need to file a federal return on behalf of the ward. In addition, guardians in Virginia may also be subject to certain taxes such as the federal gift tax. This tax is applicable if the guardian gives a gift that exceeds certain limits to the ward. Such gifts may include money, property, or stocks. Overall, it is important to understand and be aware of any tax implications of a guardianship in Virginia. Keeping track of expenses, filing accurate returns, and understanding any potential taxes are all important for a successful guardianship.

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