Posted by Karen Munoz, EA

Filing Tax Income for a Deceased Person

Filing Tax Income for a Deceased Person

The executor, most of the time, is charged with filing the state and federal income tax return for the deceased at the year of death. The surviving spouse is responsible if they file a joint tax return. 


Do they need a tax return?

If the deceased didn't get more income for their last year on earth – less than $12,400 for a single person under 65, or below double for married filing jointly – filing a federal income tax for the deceased is not essential. The minimum threshold, known as the standard deduction, is adjusted every year.

Gross income includes goods, money, property that the deceased got from pension, job, investments, IRA, disability payments, etc. People with huge incomes will have a big part of their Social Security taxed. Gross income also takes care of self-employment income. 

Even if you don't need a return, you need to file one, especially if you expect a refund. There might be a refund if the tax was withheld from the deceased's salary, pension, or annuity. 


Social Security benefits Tax 

The marital status and entire income are used to know if the social security can be taxed. As a rule, if the deceased survived only on social security, such will not be taxed. However, if the person got other income, a worksheet in Form 1040 can help you deduce how much will be taxed. 


Rules for Surviving Spouses

There are special rules for surviving spouses.

  1. Your Return should be Joint: the spouse that survives might file a joint return for the year of the death of their spouse. This only applies if the surviving spouse does not remarry in the year of their spouse's death. 

  2. Tax benefits: A surviving spouse with a dependent kid might qualify and receive an income tax break for two years following the death. If the surviving spouse qualifies for the special filing status called "qualifying widow(er)," such can pay couples' tax rate, which might be a smaller tax bill. 

Here are the requirements one need to meet:

  1. You should qualify to file a joint report with your partner at the year of death. It doesn’t matter if you did or not

  2. You should be single for the entire tax year

  3. There should be a kid, stepchild, foster kid that qualifies as your dependent for the tax year

  4. Half of the maintenance fee for the home should come from you, and the house should be your kid's primary residence.


Essential Forms worth using. 

You will need the common IRS Form 1040 – US Individual Income Tax Return to file the federal income tax for the deceased. 

The executor needs to attest to the form in the capacity of an estate representative. For a surviving spouse filing a joint return, you should sign yourself and add "signing as a surviving spouse." For persons that are not the executor with one appointed before the due of the return, the executor also needs to sign. 

In the absence of a surviving spouse and an executor, anyone in charge of the deceased's property will sign such a return as "personal representative."


Time to file the Income-tax Return 

The income tax for the year in which the person died will be called the final tax return. The due date is when the tax will be due had the person been alive. This will be April 15 of the year after the death. 

If the deceased hadn't filed a tax return yet for previous years, one would need to file such. As a result, if someone dies in February and has not filed the return for the last year, two returns are compulsory – one for the previous year and the other for the year of death. 


Claiming Refunds

A surviving spouse filing a joint return needs no extra paperwork for such a refund. However, any third party filing the return for the deceased needs some additional documents. 

  • The executor appointed by the court needs to attach a copy of the court document, which gives the authorization to act. It is called several names like Letters of Administration, Letters of Testamentary, depending on the state. 

  • For someone not appointed by the court to represent the estate, you should file Form 1310


FOR MORE INFORMATION ON HOW KAREN MUNOZ, EA CAN BEST HELP YOU WITH YOUR TAX FILING NEEDS, PLEASE CLICK THE BLUE TAB ON THIS PAGE.


THANKS FOR VISITING.

Karen Munoz, EA
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