There’s nothing worst than losing someone you know but unfortunately, the IRS still wants to collect it’s share of taxes once the individual passes away.  As an executor, legal representative or surviving spouse, it’s important to understand what is needed to file taxes for deceased taxpayers. We’ll look at everything you need to know so you’ll be in a position to file taxes for a deceased taxpayer. 

 1 – Who is Responsible for Filing Taxes for a Deceased Person?

If you are questioning who has to file taxes for a deceased person then there’s quite the chance that a bit of the responsibility lies with you. Even if not to file then you might want to help out the surviving spouse or legal representative.

A legal representative is often a parent’s child or individual’s friend who has been designated.

2 – What Happens if You Don’t File Taxes for a Deceased Person?

Assuming the deceased person owes taxes during the year and they go unpaid, the IRS can take action on the person’s estate. They may even come after the legal representative of the estate to get the money due to them from the estate.

That is why it is important to file that final tax return and report all income up to the date of death.

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3 – How Do I File a Deceased Person’s Tax Return?

Filing a deceased parent’s tax return or a deceased person’s tax return is similar to filing your own tax return. The difference is you may need to make a request to the IRS for their information. Some of the information you can request from the IRS is copies of tax returns, if the deceased person owes taxes and if you need to change their contact address so you receive IRS correspondence.

Once you have all the information you need and you are a legal representative of the deceased, you will file a standard form 1040 individual tax return or a 1040-SR for seniors. Keep in mind the 1040-SR is essentially a 1040 with larger font.

You can get a CPA to prepare the final tax return if you want someone to do it for you but just keep in mind you will still need to provide the supporting information to prepare the tax return.

4 – Additional Tax Forms You Need to Know

It’s a given that you need to file a 1040 unless there was no income but there are a few other forms to be aware of when someone is deceased.

Form 706:  The first form is 706. It is the form to be filed for an estate tax return. For a lot of people, this form never applies. In 2023, the estate tax exemption was $12,920,000. Double for couples. You are only taxed on the amount greater than the exemption. If you believe you need to file an estate tax return then engaging a qualified CPA is going to be your best option.

Form 1041:  Form 1041 may sound similar at first but once you research it a bit more, you’ll notice it is designed to report income or losses of an estate or trust after an individual’s death. Think of it as a tax on your assets from the time after death until they go to beneficiaries. 

So when do you file form 1041? Once an estate has a gross income of $600 or more during a tax year. There is also one catch. If the estate has a gross income of less than $600 but a beneficiary of the estate is a nonresident alien then a form 1041 must be filed.

Important to Know: Income before death goes on form 1040 but after death goes on form 1041.

5 – Seeking Professional Help (Using a CPA)

If you’re in a situation where you’re not familiar with tax laws then you should consider hiring a tax professional who specializes in estate taxes.  Not only can they fill out all the forms for you but they can make sure you meet the applicable deadlines as well.

So, when should you get in touch with a CPA? The earlier is better. Once you’ve identified yourself as the individual helping with filing taxes for the deceased individual then you should move forward and speak to a CPA if you need help.

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Let’s Recap The Process of Filing Taxes For Deceased Taxpayers

 The first thing you should really do if you are unfamiliar with the process of filing taxes for decreased taxpayers is to speak to a CPA. Then you’ll still have to follow similar steps as these.

• Obtain a Taxpayer Identification Number (TIN) – To file a tax return on behalf of a deceased taxpayer, you will need to obtain a Taxpayer Identification Number (TIN). 
• Fill Out the Tax Forms – Once you have determined that you need to file a tax return and obtained a TIN, the next step is to fill out the tax forms. This is usually a 1040 but can also include a 1041 and 706.
• Pay Any Taxes Owed – If the deceased taxpayer owes any taxes, you will need to pay them before filing the tax returns. Generally, the personal representative of the estate must pay the taxes due. It is similar to paying regular taxes
• Do I Need to File an Estate Tax Return for the Deceased? – Speak with your CPA and keep the annual exemption amount in mind. Most people don’t end up filing an estate tax return.

Filing Taxes For Deceased Taxpayers: Final Thoughts

It doesn’t have to be stressful if you need to make a tax filing for a deceased family member (mom, dad, sister, brother) or even a friend. Working with a CPA can take a lot of stress off one’s mind but you should at least now have a game plan/ direction, if you need it and are faced with filing taxes for a deceased individual. Keep a positive attitude and you’ll be able to work through the challenge.