The deadline for filing a tax return is next month. If you’re filing on behalf of a relative or friend who has died, today’s post will address what to do if filing for a decedent.
Knowing what to do and where to start is something I didn’t know when I had to file a tax return for a decedent the first time. Thinking about filing a tax return was low on my list of things to consider.
If income was earned in the year of death, taxes may be owed. If any assets may generate income in the future, taxes may be owed. Also important to note, if there is a living spouse, a surviving spouse has the option to file a final joint federal tax return for the last year the spouse was living.
Photo by Kelly Sikkema on Unsplash
Helpful Resources from the IRS
I found helpful resources from the IRS. This IRS page provides the following information. In general, file and prepare the final individual income tax return of a deceased person the same way you would if the person were alive. Report all income up to the date of death and claim all eligible credits and deductions.
Things to know about filing the final tax return
Generally, the final individual income tax return of a deceased person is prepared and filed the same way as if the person were alive.
- The return must report all income up to the date of death and claim all eligible credits and deductions.
- If the deceased person did not file individual income tax returns for the years before their death, their surviving spouse or representative may have to file prior year returns.
- The IRS considers the surviving spouse married for the full year their spouse died if they don’t remarry during that year.
- The surviving spouse is eligible to use filing status “married filing jointly” or “married filing separately.”
- The same tax deadlines apply for final returns. If, for example, the deceased person died in 2022, their final return is due by April 18, 2023, unless the surviving spouse or representative has an extension to file.
- When e-filing, the surviving spouse or representative should follow the directions provided by the tax software for the correct signature and notation requirements.
- For paper returns, the filer should write “deceased,” the person’s name and the date of death across the top.
Who should sign the tax return
Here’s who should sign the tax return:
- Any appointed representative must sign the return. If it’s a joint return, the surviving spouse must also sign it.
- If there isn’t an appointed representative, the surviving spouse filing a joint return should sign the return and write in the signature area, “filing as surviving spouse.”
- If there’s no appointed representative and no surviving spouse, the person in charge of the deceased person’s property must file and sign the return as “personal representative.”
Other documents to include with the final tax return
Court-appointed representatives should attach a copy of the court document showing their appointment. Representatives who aren’t court-appointed must include Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer to claim any refund. Surviving spouses and court-appointed representatives don’t need to complete this form.
If tax is due, the filer should submit payment with the return or visit the payments page of IRS.gov for other payment options. If they can’t pay the amount due immediately, they may qualify for a payment plan or installment agreement.
Qualifying widow or widower
Surviving spouses with dependent children may be able to file as a Qualifying Surviving Spouse for two years after their spouse’s death. This filing status allows them to use joint return tax rates and the highest standard deduction amount if they don’t itemize deductions.
More information
- Publication 559, Survivors, Executors and Administrators
- Tax Topic No. 356, Decedents
- How Do I File a Deceased Person’s Tax Return?
- Decedent Tax Guide
The Survivor’s Tax
If you haven’t heard of the “widow’s tax” (survivor’s tax), it has impact for the surviving spouse. The surviving spouse may encounter less income with the same expenses.
Couples benefit by planning for this in advance. Suggestions include discussing strategies with your financial planner that may include Life Insurance policies, tax-free accounts (i.e. Roth and/or Health Savings Accounts) to better manage tax liabilities.
Image by WOKANDAPIX from Pixabay
Live Today, Plan for Tomorrow
I’ve learned over the years that unless you’ve experienced loss, planning for contingencies is not at the top of the list of your to do’s. Do you have the resources and support needed for you to plan and prepare?
Change is a constant in life. Planning for every eventuality is an impossible task. It’s not easy amidst a loss to think clearly or focus on what needs to be “done”.
To consider some things to consider earlier vs. later, my book The Living Planner (What to Prepare Now While You Are Living) is a resource for you. Here is a direct link to my shopping cart. Check it out HERE .
For those who prefer to access information via an online portal, I’ve created step-by-step 12 Module DIY method: Check it out HERE.
Send me an Email or Message me if you have any questions. For additional information about my work check out @ The Living Planner or @ The Living Planner.
As March continues, this quote says so much. “It was one of those March days when the sun shines hot and the wind blows cold, when it is summer in the light and winter in the shade.” —Charles Dickens ❣️ Happy Spring, Lynn
#Can’tPredictCanPrepare #PlanfortheUnplanned