Benjamin Franklin said in 1789 that “but in this world nothing can be said to be certain, except death and taxes”. One can say Franklin’s wisdom holds true to this day. Both death and taxes are inevitable and unavoidable. They are not mutually exclusive. Death unfortunately is not a valid excuse from not filing a tax return and paying taxes where one may be due.
When a taxpayer dies, the surviving spouse, other survivor or executor/administrator must file a tax return on their behalf. A surviving spouse can file a joint tax return with the decedent if they have not remarried during the tax year. If the surviving spouse remarries during the tax year, the decedent will need to file as married filing separate. Any income earned between the beginning of the tax year (Jan 1) and the date of death should be reported on the final tax return along with any deductible expenses paid before death. If the return is filed with the surviving spouse, the surviving spouse should sign the return and write “filing as surviving spouse” in the spouse for the other spouse’s signature. In addition, add the word “Deceased” after the decedent’s name in the Label section of the tax return and the date of death across the top of the tax return.
Income received after death is reported on the tax return of the recipient.
If a refund is due, Form 1310, Statement of Person Claiming Refund Due A Deceased Taxpayer should be completed, unless a joint return is being filed.
For survivors that have inherited property, money, IRA or retirement accounts, there are a variety of tax rules that apply.
For more information about death and taxes, please contact your local income tax preparation office for assistance or click below:
· Form 559 - Survivors, Executors, Administrators
· Publication 17 - Your Federal Income Tax
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.