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When a loved one passes away, part of settling their estate is settling their final tax bill. Filing taxes on behalf of someone who has passed away can require a fair bit of detective work, as well as a solid knowledge of tax laws. If resources permit, working with a qualified tax professional can make this task easier and less stressful. Read on to understand the basics and find out how to proceed with a simple tax filing.
Do I Need to File Taxes for a Deceased Relative?
A deceased person must have taxes filed on their behalf for their final year. There's an exception if the person wouldn't have had to file taxes if they were alive—for example, if they didn't have enough income to require it. See the chart below for the minimum amount of gross income needed to require filing a tax return.
|Minimum Income Requirements for Filing Tax a Return|
|Filing Status||Under 65||Over 65|
|Head of household||$18,800||$20,500|
|Married filing jointly||$25,100 (both spouses)||$26,450 (one spouse)|
$27,800 (both spouses)
|Married filing separately||$5||$5|
You should also consider filing a tax return if you are a surviving spouse and intend to file jointly, if the deceased person may have been entitled to refundable tax credits, or if you believe a refund is due for any reason.
How to File a Tax Return for a Deceased Person
Follow these steps to file a tax return on a loved one's behalf:
- Determine who should file the return. The responsibility for filing a deceased person's tax return usually falls to the executor or administrator of the estate, or to a surviving spouse. A surviving spouse who normally uses the married filing jointly status can file their taxes as usual. At the top of the tax form, the surviving spouse will write "deceased," their spouse's name and the date of death. If you're filing taxes as an executor, administrator or legal representative, include Form 56 along with the completed 1040 or 1040-SR to show the IRS you have the right to file the tax return.
- Know the correct filing deadline. Tax returns are due on the tax filing deadline of the year following the person's death. So, for example, a person who passed away in 2021 would have a final tax return due by April 18, 2022. You can file for an automatic extension using IRS Form 4868 if you need additional time.
- Complete the return. You'll use the same tax forms the deceased person would have used if they were alive. If you weren't involved in the person's finances before, it may be challenging to obtain the information you need. A prior year's tax return can be a helpful roadmap, providing clues on where to look for W-2 and 1099 forms as well as investment account income and bank interest. Look for a paper copy of a recent tax return or use the IRS' guide to getting information for a deceased person to get a transcript of their past tax return. You should also find any documents already sent to the IRS on the person's behalf, such as 1099s.
You may need to file multiple tax returns, including federal, state, local and business—and you may need to file returns for multiple years. For example, if a person died in February 2022, they would likely need to file tax returns for 2021 and 2022.
Keep in mind that medical expenses exceeding 7.5% of the person's adjusted gross income are tax-deductible if you itemize deductions on their return. If the person suffered a prolonged illness, it may be helpful to gather medical bills to see whether some of their expenses may be deductible. Eligible expenses include medical bills paid within a year after the person's death.
When filing a deceased loved one's taxes, you may have a number of questions. Here are answers to common dilemmas in this situation:
- What if I don't account for all the income or make a mistake? The IRS catches many mathematical errors during its automated review process. But if you claimed the wrong filing status, miscalculated income, or made an error on deductions or credits, you can file an amended return using Form 1040-X, Amended U.S. Individual Income Tax Return. You have three years to file an amended return and receive a refund. The IRS also has three years to notify you of an error they've found. You can file Form 4810: Request for Prompt Assessment to limit this review period to 18 months.
- What if the person owes taxes? Taxes owed should come out of the estate, prior to making a final distribution to beneficiaries. If the estate's money is tied up in assets and you need additional time to settle, you can request a payment arrangement with the IRS. With a payment arrangement, you will likely pay interest and penalties on the outstanding balance.
- What if a refund is due? File Form 1310: Statement of a Person Claiming Refund Due to a Deceased Taxpayer to request that the refund be issued to the correct party. A surviving spouse can also use this form if a refund check arrives with both spouses' names on it.
- What about estate taxes? In 2022, the gross value of an estate must exceed $12.06 million for federal estate taxes to kick in, although state estate taxes may apply. Use Form 706 to calculate and file estate taxes if necessary. Separately, if the assets of an estate earn more than $600 in income before being distributed to heirs, you must file Form 1041: Estate Income Tax Return.
Helpful IRS Resources
Here are links to five resources provided by the IRS that can help you file your deceased loved one's return:
- Interactive Tax Assistant Tool: How Do I File a Deceased Person's Tax Return?
- Interactive Tax Assistant Tool: Do I Need to File a Tax Return?
- Publication 559: Survivors, Executors and Administrators for Use in Preparing 2021 Tax Returns
- Form 1040 for 2021: U.S. Individual Tax Return
- Form 1040-SR: U.S. Tax Return for Seniors
Getting Help if You Need It
Completing your own tax return can be confusing at times, and completing someone else's tax return can be much more difficult. A trusted tax professional can help you navigate tax filing requirements, work out a payment plan for any taxes owed, or file paperwork to receive a refund and avoid potential pitfalls along the way.
Finally, be aware that deceased taxpayers can be targets of identity theft. Scammers may lift information from obituaries or run phishing scams to collect information that helps them file fraudulent tax returns. To help protect the deceased from identity theft, you can send a copy of their death certificate to the IRS at the address where the taxpayer would normally send a paper return. You can also notify credit bureaus directly and review a copy of the deceased person's credit report for any signs of identity theft.