The ABC of Filing Tax Returns for the Deceased
Death is an inevitable part of a human life. When a person dies, he leaves his mortal body but taxes may also remain attached to him or her. In fact after death, one final tax return needs to be filed for the deceased person.
After death, a person’s finances are immediately converted into something which is called an estate. The estate then has the responsibility of filing a tax return after covering the finances that include income and distributions to the heirs and other beneficiaries of the deceased.
When someone passes away, an executor or trustee takes charge of the estate of that person. The exact designation depends on the type of estate they are intended to plan for. The executor or trustee will sign the tax return on behalf of the deceased person and will declare him or her as deceased.
For a deceased person, the final personal tax return is filed in Form 1040. Yes, the same tax form that is used for any personal tax return will work for filing a return for a deceased person.
The day of death of the deceased person is taken as the cut-off date to ascertain how much taxes are actually due by him or her. Whatever income the person may have made in that year before the date of his or her death is covered in the personal tax return. And, the income earned after the death is to be filed as the estate tax return, which is the responsibility of the estate.
In most cases deductions are certainly going to give a joy in case of tax returns for the deceased. You can claim a full deduction and any other expenses for the year that precedes the tax payer’s death not including the date on which the person passed away. In other words, you don’t have to worry about any calculations that are based off the days that come after death. For example, if a person passes away in the month of February, you are eligible for full write-offs for the rest of the year.
When the deceased is supposed to get tax refund, the IRS will consider releasing a refund if the deceased is reported as being married prior to his or her death. If the person was married, the spouse is entitled to receive the refund. If the person was not married, you need to file a Form 1310 to be eligible for the refund. This form is basically a declaration that states – you have the right to claim the refund and absolve the IRS of any involvement in any disputes that may arise in future.
The ABC of Filing Tax Returns for the Deceased by Steve