Mom has dementia and credit cards.  How does his family cancel the accounts?

Mom has dementia and credit cards. How does his family cancel the accounts?

Dear Liz: My mom has two credit cards that haven’t had any activity for a year and a half due to being in an assisted living facility. She lives with dementia and is no longer able to make decisions on her own (personal or financial). Should I or am I even able to cancel these cards or should I wait for it to pass and send a death certificate to the bank?

Answer: Theoretically, you could close accounts for her if you have a legal document known as a Power of Attorney. These documents are designed to help you take charge of an incapacitated person’s finances. Unfortunately, banks and credit card issuers sometimes refuse to honor proxies despite legal requirements. You may need to hire a lawyer to force them to accept your authority. You can get referrals to experienced attorneys from the National Academy of Elder Law Attorneys and the American Bar Assn.

If you don’t have this document and your mother is no longer sane, you will probably have to go to court to become her custodian to make financial decisions for her. It can be an expensive process.

But there may be a simple solution. Some credit cards have an “off” switch that prevents anyone from charging the account. If the card has this feature and you can access the account online, you may be able to effectively deactivate the account even if you cannot officially close it.

Home Sales Tax Offset

Dear Liz: We recently sold a house and have taxes to pay on the proceeds. I wonder if we can take some of the proceeds and put it in 401(k) accounts and pay taxes on it later?

Answer: You cannot do this directly because 401(k) contributions are made through payroll deductions. If you haven’t yet maximized your retirement contributions, you can increase your contribution rate to offset some of the taxable income you created when you sold the house. Some employers allow you to contribute 100% of your salary, up to the IRS contribution limits. In 2022, the limit is $20,500 for those under 50 and $27,000 for those 50 and over.

You can also contribute $6,000 to an IRA (or $7,000 if you’re 50 or older), but your ability to deduct the contribution depends on your income if you’re covered by a company plan such as a 401(k). (k). If you’re married and have a work plan, your ability to deduct an IRA contribution will phase out with a modified adjusted gross income of $109,000 to $129,000.

Remember that you can exempt up to $250,000 of home sale profits (or $500,000 for a couple) if you owned and lived in the property as your principal residence for at least two of the last five years. You may also be able to reduce the taxable gain if you have maintained good records of qualifying home improvements. For more information, see IRS Publication 523, Selling Your Home.

Remember “Where’s my refund?”

Dear Liz: My CPA left out some income when e-filing my return at the end of March. The CPA filed a corrected statement a few days later. I owe $10,895 and still haven’t received my refund. What happened to the 21-day refund period for e-filing? I can’t reach the IRS on the phone. The state reimbursed me in just eight days.

Answer: The IRS tries to process refunds within three weeks when taxpayers file their returns electronically and use direct deposit. But that timeframe goes out the window if there are any problems, especially in recent years.

The IRS is still grappling with a massive backlog triggered by the pandemic. The agency was already struggling with outdated computer systems and a shrinking workforce due to years of underfunding. Then its treatment centers were shut down by shutdowns, followed by congressional orders to distribute hundreds of millions of payments (the three economic aid payments, followed by six months of advanced child tax credit payments ).

You can use the “Where’s my refund?” tool on the IRS site to track your refund status, but unfortunately there’s not much you can do to speed things up.

Liz Weston, Certified Financial Planner, is a personal finance columnist for NerdWallet. Questions can be sent to him at 3940 Laurel Canyon, #238, Studio City, CA 91604, or by using the “Contact” form on

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