Deceaseds Final Tax Return

How to File the Deceased’s Final Tax Return

Filing the final tax return for a deceased individual is an important responsibility for the estate executor or administrator. This guide walks you through the process, from determining what tax returns are required to understanding deadlines and filing procedures.

What Tax Returns Should Be Filed When a Person Dies?

When an individual passes away, multiple tax filings may be necessary, depending on the financial situation of the deceased and their estate. The most common filings include:

Individual Tax Return

The final individual tax return (Form 1040 or 1040-SR) must be filed for the deceased, reporting all income, deductions, and credits up to the date of death. If prior-year tax returns were not filed, the executor is responsible for completing them.

Required Forms:
- Current year tax return: Form 1040 or 1040-SR
- Previous years’ returns (if unfiled): Form 4506-T (Request for Transcript of Tax Return)
- Claiming a tax refund: Form 1310 (Statement of Person Claiming Refund)

Estate Income Tax Return (Form 1041)

If the estate generates $600 or more in income (from investments, rental properties, or other sources), an estate income tax return (Form 1041) must be filed.

Common estate income sources include:
- Bonds
- Mutual funds
- Stocks
- Savings accounts
Additional Form:
- Form 56: Required to notify the IRS of the executor’s fiduciary relationship with the estate.

When Is an Estate Tax Return Required?

Estate tax returns (Form 706) are not required for most estates. They are only necessary if the total value of the deceased’s assets exceeds the federal estate tax exemption.

Federal estate tax exemption: $12.06 million (as of 2022, subject to change)
Example of states with lower exemptions: New York requires estate tax filings for estates valued over $5.93 million.

When is the Estate Tax Return Due?

Deadline: Must be filed within nine months of the date of death.
Extension: An automatic six-month extension is available using Form 4768, but estimated taxes must still be paid within the original nine-month period to avoid penalties.

How to File an Estate Tax Return

If required, filing an estate tax return involves several key steps:

Gather All Estate Financial Information

Obtain documents showing asset values at the time of death, such as:
- Real estate deeds
- Bank and investment account statements
- Life insurance policies (if included in the estate)
- Business assets (if applicable)
Collect the deceased’s personal identification documents (death certificate, birth certificate, Social Security number, etc.).

Complete and File IRS Form 706

Estate Tax Return Form: The executor must file Form 706, which is a 29-page document detailing the estate’s financial holdings.
Professional Assistance Recommended: Due to the complexity of estate tax filings, it is strongly recommended to seek help from an estate attorney or tax professional.

Pay Any Applicable Estate Taxes

If estate taxes are due, the executor must arrange for payment within the nine-month deadline to avoid penalties.

Who Files the Estate Tax Return?

The executor or administrator of the estate is responsible for filing the estate tax return. While a professional accountant or attorney can prepare the return, the executor must submit it to the IRS and ensure compliance with all tax obligations.

Key Takeaways

The executor must file Form 1040 (individual return) and, if applicable, Form 1041 (estate income tax return).
An estate tax return (Form 706) is only required for estates valued at $12.06 million or more (subject to change).
Estate tax returns are due within 9 months, with an optional 6-month extension (Form 4768), but estimated tax payments must be made within the original timeframe.
Consulting with an estate tax professional is highly recommended for large or complex estates.

Need Help with Estate Tax Filings?

Filing a deceased individual’s taxes can be overwhelming. If you need guidance, consult with an estate planning attorney or tax professional to ensure compliance and avoid costly mistakes.

Schedule a Free Consultation Today!

Get expert assistance with filing estate and final tax returns. Contact us to schedule a free consultation with an experienced tax professional today!