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Who Is Responsible for Filing and Paying a Deceased Person's Taxes?

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Core Group

 

Losing a loved one brings a lot of chaos and upheaval at a time when you are trying to grapple with the loss.

Once the immediate decisions have been taken care of, you can turn to more practical matters of dispersing assets and selling property. Depending on the size and complexity of the estate, there might be many people involved in handling these tasks.

Who is responsible for dealing with a deceased person's taxes? Let’s take a look at whose job it is to deal with taxes and what you need to complete the task.

Who Has to Do It

If you have been named executor or administrator of the estate of a deceased person, taxes will be your responsibility. They can only be filed by someone legally authorized to act on behalf of the estate. This is the personal representative named in the will or appointed by the court.

It’s a task you need to take seriously, as any mistakes or omissions can result in penalties that you would be responsible for.

The surviving spouse can file a joint return in the year of death as long as the couple’s personal taxes were filed that way in the past.

What You Need to Do

Unless you handled the deceased person's taxes in the past, you might not be familiar with their financial situation and whether they even need to file taxes.

Determining this is your first step. You can use the IRS’s interactive tax assistant to help you figure that out. You’ll need to file for the year of death as well as any previous years when the deceased might have failed to file.

From there, the process is just like you would do for your individual taxes. You prepare income, deductions, and credits, then file the returns by the April 15 deadline. You’ll be responsible for paying taxes or collecting refunds on behalf of the estate.

If you’ll signing the return, you will also need to complete IRS Form 56 and attach it to the tax return.

Which Taxes and Returns to File

The list of forms above relates to federal income tax. Keep in mind that unless the deceased lived in one of the nine states that have no income tax, you’ll also need to file a state income tax return.

It’s just one of the many returns and taxes you might be responsible for as the executor. The list might also include:

  • Local/city tax
  • Business tax
  • Self-employment tax
  • Gift tax
  • Estate tax
  • Generation-skipping transfer tax

It’s unlikely the estate will need to pay a federal estate tax since that is limited to estates worth $11.58 million or more. However, 14 states level a state estate tax, so make sure you check for ties to them that might require you to file that form.

The two returns you are most likely to need to concern yourself with are Form 1040 for federal income tax and Form 1041 for federal estate income tax. The first is the one you’re familiar with that’s due April 15 each year. The second one covers income the estate earns after the death, like interest on a savings account.

Need Help Filing a Deceased Person's Taxes?

Filing a deceased person's taxes isn’t difficult, but it can be confusing to keep track of the additional forms that need to be filed.

Because there are potentially taxes you aren’t familiar with, it can help to have a tax professional provide advice or prepare the forms for you.

If you have questions about your tax responsibility for a deceased person, feel free to contact us to walk you through the process and answer your questions. Our team can help you with gathering and preparing all the forms you need and getting them filed on time.


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