When someone passes away, it can be difficult to know who is responsible for filing the deceased person’s taxes. The executor of an estate is typically responsible for filing the final tax return and other required tax forms after a loved one has died. However, you can also file taxes on behalf of a deceased person if you are an executor or other party in charge of their affairs. In this article, we’ll answer some common questions about how to file taxes for deceased persons.
In this guide, we find out if you can File Taxes For A Deceased Person, how do i file a final tax return for a deceased parent, who gets the tax refund of a deceased person, and how long does it take to get a tax refund for a deceased person.
you can File Taxes For A Deceased Person
File taxes for a deceased person
If you’re the executor of a deceased person’s estate, you can file their taxes. The IRS requires that an executor of a deceased person’s estate file their final tax return for them for the year in which they died. In order to do this, you’ll need to fill out Form 1041 and submit it with any other forms required by the IRS. The deadline for filing depends on when the person passed away; check out [this article](https://www.irs.gov/taxtopics/tc607) for more information about when and how to file taxes owed by a deceased person if they pass away during tax season or immediately prior to it.
If you’re not sure whether or not your loved one has paid off any debts before they passed away, check out [this article](https://www.irs.gov/taxtopics/tc508) on how survivor claims work when filing taxes after death
How to file taxes for a deceased person
The executor of the deceased person’s estate can file for that person. The IRS will send the forms to you, and you’ll have to provide proof of your appointment as executor. You’ll also need to provide a copy of the death certificate and a court document appointing you as executor. Once everything is in order, you can file amended tax returns for a deceased person or past due tax returns for a deceased person.
Are there any hardships involved in filing taxes for a deceased person?
Filing taxes for a deceased person is not as difficult as it may seem. In fact, if you have all of the necessary documentation, it should be relatively straightforward to file your tax return on behalf of someone who has passed away.
The first step in filing taxes for a deceased person is to determine whether or not they have an executor. An executor is someone named in their will or by law (depending on where you live) to manage their estate after death. If there’s no executor, then you will need to act as one yourself and report any income from the estate that you receive directly.
If there is an executor or someone else who’s been appointed by the court and/or named in any legal documents (like wills), then he or she should be handling this process for you already and providing guidance throughout the year with regards to making charitable contributions and other tax planning measures which may apply depending upon how much money comes into play during their tenure as holder of power over funds belonging solely within earshot proximity of being yours right now but soon after becoming somebodies property instead–but let’s not get ahead ourselves here!
What do you do if the executor does not have a TIN?
If you’re a personal representative (executor) and you don’t have a TIN, you can apply for one. This will be an Employer Identification Number (EIN). An EIN is used to identify the business activities of individuals, trusts and estates.
The IRS will assign an EIN if:
- The deceased person owned a business or had income from dividends, retirement plans or interests in partnerships or LLCs
- Someone other than the deceased was authorized by law to act in their stead
- The executor has court authorization from the probate court
Can the executor get a Social Security number for the estate?
The executor of an estate can apply for a social security number for the deceased person’s estate.
To do this, you’ll need to provide the Social Security Administration with:
- A copy of the death certificate (or other legal proof of death)
- A copy of the will or other pertinent documents related to your ownership and control over assets belonging to the deceased person’s estate
- A copy of any trust document that outlines how funds are distributed from their account
Who is legally responsible for filing taxes for a deceased person?
To file taxes for a deceased person, you must be legally responsible for them. The executor of the estate is responsible for filing taxes. The executor is the person who has been appointed to administer the deceased’s estate—this can be a family member or a professional.
The executor will complete Form 1041 and attach Schedule A (Form 1040) to determine the decedent’s taxable income. If there are any expenses associated with caring for the estate, they must also be deducted from income before calculating tax liability on Form 1041.
How can an executor file past due tax returns for a deceased person?
If you are an executor of a deceased person’s estate and need to file past tax returns, you may be wondering how to go about it. The IRS has provided several options for filing and amending past due tax returns when the original filer has passed away.
If you don’t know where the deceased’s tax return or supporting documents are, you can use Form 4852 Substitute for Form W-2, 1098, 1099-R, 5498 or Other Information Returns. Use this form if no information return was filed with the IRS by the date required under law or would have been required if the form had been filed on time. If a correct information return was filed with the IRS on time but it doesn’t show all amounts that should appear (for example: wages paid), then use Form 4852 instead of waiting until next year’s filing period opens up again so that your executor can amend them before submitting one final version after going through all of their paperwork thoroughly enough times over such as three weeks worth of nonstop reading sessions each day before heading off into another world after death occurs again here in our lives here on Earth below us above us everywhere else too many places at once yet still finding room left over somewhere else far away from here without ever leaving home because home is where heart lies…
What is the role of an estate executor?
The estate executor is the person responsible for managing the deceased person’s assets and paying any taxes due.
The estate executor is also responsible for filing past tax returns for the deceased person, if not already done by someone else.
The estate executor must pay any taxes due on behalf of your loved one’s estate, which can be paid out of their own pocket or from funds from the estate itself.
You can file and even amend past tax returns on behalf of a deceased person.
Filing and amending past tax returns on behalf of a deceased person can be done by the executor, or someone the executor has authorized to do so. You will need to contact the IRS and provide documentation that shows you are indeed the executor of the estate.
The executor is responsible for paying any income tax due from a deceased person’s estate as well as filing their final income tax return with Form 1040 (United States Individual Income Tax Return). The executor should file an amended return for any year when it appears that there may have been too much money withheld from your loved one’s paycheck or not enough was withheld during their lifetime.
how do i file a final tax return for a deceased parent
The IRS demands a final accounting, and it’s up to the executor or survivors to file the paperwork. Here’s what you need to know about the deceased’s final tax return, reporting income and deductions, inheritance and more.
For information on the third coronavirus relief package, please visit our “American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.
Federal taxes
When someone dies, the need to deal with federal and state tax issues often continues. In fact, taxes can further complicate the lives of survivors. Federal estate taxes may be due, and state inheritance taxes could come into play as well. Our focus here will be on federal income taxes.
Final tax return
Upon the death of a taxpayer, a new taxpaying entity—the taxpayer’s estate—is born to make sure no taxable income falls through the cracks. Generally, income is taxed either:
The filing of the deceased taxpayer’s final return usually falls to the executor or administrator of the estate, but if neither is named, then the task needs to be taken over by a survivor of the deceased. The final return is filed on the same form that would have been used if the taxpayer were still alive, but “Deceased:” is written at the top of the return followed the person’s name and the date of death. The deadline to file a final return is the tax filing deadline of the year following the taxpayer’s death.
Reporting income
Only income earned between the beginning of the year and the date of death should be reported on the final return.
For taxpayers who use the cash method of accounting, as most do, income is considered earned as it is actually received or at least made available to them. Taxpayers who use the accrual method of accounting, on the other hand, count income as earned when they actually earn it, regardless of when they receive it.
The distinction is important because some income that might logically seem to belong on the decedent’s final return is considered income in respect of a decedent (defined below) and is taxable either to the estate or to the person who receives it.
Earnings and income
Income in respect of a decedent refers to income that the decedent had a right to receive at the time of death, but that is not reported on his or her final return. It does not include earnings on savings or investments that accrue after death.
Say a taxpayer who has a substantial amount in money-market mutual funds dies on June 30th. Only interest earned up to that date would be reported on the final tax return. Earnings after that date are taxable to the beneficiary of the account, or to the estate.
That can create some hassles since the payer—a mutual fund, bank or broker, for example—will report income to the IRS on a 1099 form. Although you should try to get ownership of the account changed as quickly as possible after the death of the owner, the 1099 income report may well show more income assigned to the decedent than it should. In such cases, you’ll need to report the entire amount on Schedule B of the decedent’s return, and then deduct the amount that is being reported by the estate or other beneficiary who actually received the income.
Money you inherit is generally not subject to the federal income tax. If you inherit a $100,000 certificate of deposit, for example, the $100,000 is not taxable. Only interest on it from the time you become the owner is taxed. If you receive interest that accrued but was not paid prior to the owner’s death, however, it is considered income in respect of a decedent and is taxable on your return.
Inherited IRAs and retirement accounts
A major exception to the general rule that inheritances are not subject to the income tax—and one that is taking on more and more importance—is the money in traditional IRAs, employer-sponsored retirement plans including 401(k)s and 403(b)s, and annuities that is treated as income in respect of a decedent, and therefore taxed to the heir.
An important exception to this major exception covers Roth IRAs and Roth 401(k)s. No taxes are due on inherited Roth distributions as long as the account had been open at least five years at the time of the owner’s death. If the original owner dies before the five-year period has elapsed, you can satisfy the holding period by rolling the account over into an inherited Roth IRA and waiting until the holding period has passed.
An important change took effect in 2007 that allows non-spouse beneficiaries who inherit a 401(k) to roll over that money into an inherited IRA, enabling them to spread out their distributions and associated tax bills over their lifetimes, just as spouses have always been able to do. Traditional 401(k)s and similar tax-deferred employer-sponsored retirement plans can be rolled over into traditional inherited IRAs. A beneficiary of a Roth 401(k) can roll over the funds into an inherited Roth IRA.
U.S. Savings Bonds
There’s a special rule for U.S. Savings Bonds, from which income generally accrues tax-free until the bonds are cashed in. When the bond owner dies, the accrued interest may be treated as income in respect of a decedent.
In that case, the new owner of the bonds becomes responsible for the tax on the interest accrued during the life of the decedent. (The tax isn’t due, however, until the new owner cashes in the bonds.)
Alternatively, the interest accrued up to the date of death can be reported on the decedent’s final income tax return. That could be a tax-saving choice if the decedent is in a lower tax bracket than the beneficiary. If that method is chosen, the person who gets the bonds only includes in income the interest earned after the date of death.
Reporting deductions
On the deduction side of the ledger, all tax-deductible expenses paid before death can be written off on the final return. In addition, medical bills paid within one year after death may be treated as having been paid by the decedent at the time the expenses were incurred. That means the cost of a final illness can be deducted on the final return even if the bills were not paid until after death.
If deductions are not itemized on the final return, the full standard deduction may be claimed, regardless of when during the year the taxpayer died. Even if the death occurred on January 1, the full standard deduction is available.
Filing the final return
If the taxpayer was married, the spouse may file a joint return for the year of death, claiming the full standard deduction, and using joint-return rates.
The executor usually files a joint return, but the surviving spouse can file it if no executor or administrator has been appointed. If the surviving spouse has a qualifying dependent and meets other requirements, they can file as a qualifying widow/widower for the two years following a spouse’s death. That basically lets you continue to use the same tax brackets that apply to married-filing-jointly returns. Otherwise, the surviving spouse can file a joint return for the year of death.
If an executor or administrator is involved, they must sign the return for the decedent. When a joint return is filed, the spouse must also sign. When there is no executor or administrator, whoever is responsible for filing the return should sign the return and note that they are signing “on behalf of the decedent.” If a joint return is filed by the surviving spouse alone, they should sign the return and write “filing as surviving spouse” in the space for the other spouse’s signature.
If a refund is due, there’s one more step. You should also complete and file with the final return a copy of Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. Although the IRS says you don’t have to file Form 1310 if you are a surviving spouse filing a joint return, you probably should file the form anyway to head off possible delays.
Basis of inherited property
For deaths that occurred in years other than 2010, the tax basis of any property a taxpayer owns at the time of their death is typically “stepped up” to its date-of-death value. Since the basis is the amount from which any gain or loss will be figured when the new owner ultimately sells the property, this means that the tax on any appreciation that occurred during the taxpayer’s life is essentially forgiven.
The person who inherits the property—a house, say, or stocks and bonds – would owe tax only on appreciation after the time of death. It’s important that you pinpoint date-of-death value as soon as possible—the executor should be able to help—to avoid hassles later on when you sell it. Likewise, if assets have lost value during the original owner’s life, the tax basis is stepped down to date-of-death value.
Survivor’s home sale exclusion
Tax law provides for an extended period of time during which a surviving spouse may take up to $500,000 of home-sale profit tax-free, rather than being restricted to the $250,000 amount allowed for single homeowners. The law allows the surviving spouse to use the $500,000 exclusion if the home is sold within two years of their spouse’s death.
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who gets the tax refund of a deceased person
Nothing is certain except death and taxes—and the headaches that result when the two intersect. Rarely do people die with their finances neatly tied up, and one of the frequent issues that arises is the matter of the deceased person’s (decedent’s) last income tax refund.
If a person dies being owed an income tax refund (as thousands of people do every year), what happens to the money? Obviously, the decedent cannot cash a check made out to him or her. A refund in the sole name of the decedent is an asset of the decedent’s estate. Eventually, it will be distributed to the decedent’s heirs or beneficiaries (assuming there is money left in the estate after all legitimate debts are paid). But what happens in the meantime? And what if the tax refund is from a tax return jointly filed with a spouse?
Tax Refunds for Jointly Filed Income Tax Returns When One Spouse Has Died
When one spouse has died, the surviving spouse can file a joint income tax return for the tax year in which the deceased spouse died. The surviving spouse needs to indicate on the tax return that their spouse is deceased. According to the Internal Revenue Service, the surviving spouse should write this notation above the area on the return where the address is entered. The notation should state the word “DECEASED,” the deceased spouse’s name, and the date of death.
If the surviving spouse is filing a joint income tax return, but no personal representative has yet been appointed for the decedent’s estate, the survivor should sign the return in their own name. In the signature area below their signature, they should again sign and print “filing as surviving spouse.”
If a personal representative has been appointed in the decedent’s probate matter, the personal representative should sign the return together with the surviving spouse. The address of the surviving spouse and the decedent’s last address must, of course, also be on the return.
Of course, many people file their income tax returns electronically these days, and this is still possible in the case of a joint return with a deceased spouse. Tax preparation software typically prompts a user to indicate whether the spouse is deceased and then directs the user accordingly regarding notation and signature requirements.
It’s not terribly common, but what happens if the surviving spouse remarries before the end of the year in which the deceased spouse died? In that case, the surviving spouse may not file a joint income tax return with the deceased spouse. Instead, whoever files the return on behalf of the deceased spouse would do so under the filing status “married, filing separately.”
Claiming Tax Refunds Due to a Deceased Taxpayer
If the deceased taxpayer was not married, the personal representative of their estate (if there is one) should file the income tax return. If a personal representative has not been appointed, a survivor of the deceased can file, noting on the return that the taxpayer is deceased.
If a tax refund is due to a deceased taxpayer, there may be another step to take. The person filing the income tax return should also file IRS Form 1310, Statement of a Person Claiming Refund Due a Deceased Taxpayer.
The Internal Revenue Service does not require surviving spouses to file Form 1310 in order to receive the tax refund, many tax preparers recommend filing it anyway. The form does have a box to check if the filer is a surviving spouse, and filing the form could help to prevent delays in processing the refund. Also, if a surviving spouse has received a refund check made out jointly to the surviving spouse and the deceased spouse, the survivor can return the check along with Form 1310. A new check will be issued in the name of the surviving spouse.
The form is brief, and requires filers to disclose whether the decedent left a will; whether a personal representative has been appointed in the decedent’s estate, and if not, whether one is going to be appointed.
Form 1310 also asks the person completing the form to indicate whether they intend to pay out the tax refund according to the laws of the state where the decedent was a legal resident. If the person filing the form answers “no” to that question, a refund cannot be issued until the filer presents a court certificate showing that they have been appointed personal representative of the estate, or other documentation that they are entitled under state law to receive the refund.
If you are a surviving spouse or the personal representative of an estate and have questions about the decedent’s income tax filings or tax refund, contact a probate attorney experience in tax law to schedule a consultation. Death and taxes are certain. What to do after a death may not be. An attorney can help.
how long does it take to get a tax refund for a deceased person
Even dead people are waiting on their tax refunds — and loved ones say it’s holding up emotional closure
Amber Marino’s father died in February 2021, but she still pays $8 a month to keep his bank account open.
“It’s just sitting there,” the 39-year-old from Tennessee told Insider.
That’s because Marino’s father is still waiting on a tax return from 2020, which is supposed to be sent to his bank account.
Marino said she filed for an extension while waiting on paperwork from the court that allowed her to file on his behalf. Once she received the paperwork, she sent it in through certified mail in June. US Postal Service tracking showed it had arrived at the IRS in early June.
“Then I waited — and I continue to wait,” Marino said.
A new tax season is here, but dozens of Americans told Insider they’re still waiting on refunds from years past. The IRS is understaffed, underfunded, and grappling with a backlog of millions of returns — some of which belong to taxpayers who are no longer alive. For living taxpayers, delays are threatening their financial security and ability to afford things like rent and groceries.
For taxpayers waiting on a loved one’s refund, the delays can prolong the process of closing out their loved one’s estates — and can take an emotional toll on the people left behind.
In Marino’s case, that means keeping a bank account open for months, with the probate process complete, except for that tax return of about $850.
“It’s really awful,” she said. “It’s overwhelming.”
When reached for comment, the IRS directed Insider to resources on accessing returns when a direct-deposit account’s information is incorrect.
They’re calling, but nobody ever picks up
Marino called the IRS every day for two weeks. She “continually” got a message that the agency was experiencing high call volume and to call back later.
Meanwhile, in Ohio, Susan and Vince Ashcraft have been trying to get in touch with the IRS for two years. In 2019, Vince’s mother died. The Ashcrafts filed a return on her behalf around March 2020, they said, and filed an amended return when they realized there was a misspelling on the original return.
“We did get a letter in the mail after the amended return: ‘We received your amended return and you should have it processed within six weeks,'” Susan said.
“That was over a year ago,” Vince said. “I don’t believe we’ve ever talked to a live person.”
IRS commissioner Charles Rettig wrote an op-ed for Yahoo Money this week saying that the agency needs help. He highlighted measures the agency has taken to combat the unprecedented confluence of a pandemic, new responsibilities like child tax credits, and returns pouring in — but also noted that the agency’s budget has shrunk by nearly 20% in the past ten years, while staffing levels remain the same as they were in the 1970s.
Mike June, 65, has been dealing with similar woes. As the executor of his mother’s estate, he filed her 2020 return early last year. Six months later he had to refile — the return he filed was sent back because he needed to use his address instead of hers.
A few months later, the “Where’s My Refund” tool on the IRS website said that the agency needed more information and provided a contact number.
But when he has called that number and entered his refund information, or tried to talk to an agent, June said, the line rings four or five times before he gets a busy signal and the call disconnects.
“It has done that every single time I have called them, and I have called no less than 20 times,” June said.
Treasury officials have said that the IRS has about one person for every 16,000 calls that it receives.
“There’s just not really a way to overstate the stress or the workload that everyone is under,” Chad Hooper — the executive director of the Professional Managers Association, a group founded by IRS managers to improve their working conditions — told Insider.
Returns are the final piece in closing an estate
A tax return is more than just a check for people filing on behalf of a deceased loved one — it can be the last piece before finally closing out an estate.
June had been holding open one of his mother’s accounts for the return’s direct deposit. Once it arrived, he was going to liquidate her investments and distribute them equally among him and his four brothers.
“I waited for a year to do that. Finally, I thought, this money needs to be distributed. I cannot sit on it indefinitely,” he said.
Marino, who’s still keeping her late father’s account open, is in a similar boat. Her father has been gone for almost a year, and the tax return is the only piece left in finishing the probate.
“I did not think that almost a year later I would still be sitting here worried about all of his accounts and what’s going on,” she said. Even her attorney told her that everything should be wrapped up within a year. Instead, she’s stuck with the weight of worrying about his estate.
“It’s just a constant reminder that not only is he gone, his estate’s not finished,” she said.
The Ashcrafts are keeping open two or three bank accounts, unsure of where the return will get deposited.
“We just keep waiting and waiting, and we feel like our hands are tied — like we can’t do anything,” Susan said. “Her house has been sold, everything’s been closed up other than this one item, and it’s really frustrating.”
Refund delays are more than just financial — they’re an emotional toll
Beyond the financial and logistical headaches, waiting on a refund for a loved one can pack an emotional punch.
“I want to take steps to move forward and not have this hanging over me all the time,” Marino said. “This money thing doesn’t matter as much as I would like to move forward and be done.”
For Vince, it’s about closure: “There’s a part of saying goodbye to a loved one that requires the whole process to end.”
He believes that the IRS has given up on them. It’s been two years of waiting, with all of the paperwork done, and he feels that he’s hit a brick wall. He said it’s taken an emotional toll.
“This really needs to just end,” he said. “That’s the biggest frustration of all. It’s not about the money. It’s about the inability to have closure with my mom’s death.”