Normally social security benefits are not taxable. Your social security benefits are taxable when one half of your SSA benefits and other taxable income exceeds a certain amount. For a single person, that amount is $25,000. If your mother did not have any other taxable income and her income is below $8,950 (single under age 65) or $10,300 (single age 65 or older), she should not be required to file a return.

Yes, you can submit both your 2007 and 2008 returns this year. Make sure that you use the correct forms and tax tables for each year, do not combine the  income and expenses.   Report each year separately.  If mailing your returns, please send in separate envelopes to insure they are not mixed up. Also, you can still e-file your 2008 return, but you will have to file 2007 on paper and mail it in.

You can amend your return by filing a Form 1040X to claim any additional deductions or credits that were not originally claimed. Your itemized deductions will need to be more than the standard deduction for you to see a tax benefit from itemizing. You can also amend 2006 and 2007 if your itemize deductions are more than your standard deduction. If you can not itemize, note that for 2008 you can include your real estate taxes paid, up to $500 if single and up to $1000 if married in addition to the standard deduction.