How to File Taxes After a Death

After a loved one passes away, tax matters must be settled.

As the old saying goes, two things in life are certain -- death and taxes. This becomes even more poignant when a loved one passes away and the realization dawns that taxes must be filed for the deceased. Most people earn some form of income during the year and therefore have taxes withheld or make estimated tax payments. So that final tax return could provide a refund, an earned income credit or an economic stimulus refund. There are benefits to filing a tax return for a decedent, while failing to do so could result in penalties or a lien on the estate. If you are the surviving spouse or a personal representative (not an attorney or accountant) for the estate, filing the decedent's taxes is your responsibility.

Things You'll Need

• Tax forms
• W-2 form (if the deceased was a wage earner)

Instructions

1. The first step is to determine if the filing requirements are met. The customary rules concerning taxable income will apply. Remember that you want to file for the deceased because that is the only way to claim the refund that may be due. If filing for a deceased spouse, the surviving spouse should file a joint return for that year.

2. Select the appropriate tax return. Usually, it's the same one used the previous year -- typically Form 1040EZ, 1040A or 1040.

3. Fill in the decedent's name where it normally would appear, then add a comma and the word "deceased." For example: John Doe, deceased.

4. At the top of the return, write the date of death, followed by a comma and the words "decedent's date of death." For example: December 10, 2010, decedent's date of death.

5. Complete the tax return and attach all applicable forms such as W-2s, 1099s, 1099-R forms, and so forth.

6. If a refund is expected, fill out Form 1310 and attach it to the return. This form authorizes the IRS to issue the refund check to the surviving spouse or the estate's personal representative.

7. If you are a surviving spouse, in the signature area on the return, sign for the decedent and follow with "filing as surviving spouse." For example: John Doe, filing as surviving spouse.

8. If you are filing a joint return, sign your name where you normally would.

Tips & Warnings

• If the decedent had retirement income, rental property income or other earnings, the appropriate 1099 form needs to be attached to the return.

• If you are the estate's personal representative and the return is not a joint return, attach documentation verifying your appointment by the court to receive a refund. Sign the return and follow you signature with the words "filing as personal representative."

• Things become more complicated with a large estate that has various sources of income. Consider hiring an attorney or accountant to handle filing the decedent's tax return.

• Taxes must be filed for a deceased person. Otherwise, the IRS can place penalties or liens against the estate and the surviving spouse will be responsible for paying those taxes.

References

• IRS: Publication 17 (Your Federal Income Tax)
• IRS: Publication 559 (Survivors, Executors, and Administrators)
• IRS: Publication 538 (Accounting Periods and Methods)

Resources

• Henssler Financial Group: Filing Tax Returns for Decedents