Death and Taxes – How to deal with Deceased Taxpayer (Decedents)

When someone passes away the last thing you want to be thinking about is taxes. But the IRS can be cold-blooded and ruthless – when they want their money they are going to get it. So it may be your responsibility to file a final tax return for the decedent. Below is some help to make this process a little easier.

First off, a personal representative of the deceased’s estate, generally called the executor or administrator, is in charge of the decedent’s property. This person has the responsibility of filing the final income tax return of the decedent called an estate tax return when it’s due (Most years on April 15th). For additional info on the responsibilities of a personal representative can be found in the IRS guide Survivors, Executors, and Administrators Publication 559.

deceased-taxpayer

As odd as it sounds, the filing requirements for the deceased are the same as they are for the non-deceased (If that makes sense). Think of it this way, if the person were still alive would they need to file a tax return? If the answer is yes then the personal representative will have to file a tax return for them.

The final tax return should show only the items of income the decedent actually received and that were credited to his or her account during the year or that were made available to them without restriction prior to death. As well the final return can claim deductions for expenses the decedent paid before death. This all assumes the taxpayer/decedent used the cash basis method of accounting which is also the most common. If you are not sure, odds are the taxpayer was on the cash basis, although I cannot guarantee it. If you know they were not using the cash basis then you need to use that method when filing the final return.

When filling out the tax return write the word “DECEASED,” on the top of the tax return along with the decedent’s name and date of death. If filing a joint return, write the name and address of the decedent and the surviving spouse in the name and address fields. If not filing jointly write the decedent’s name in the name field and the personal representative’s name in the address field. If the deceased taxpayer is due a refund you might have to file an additional Form 1310 with the tax return - If you are a surviving spouse filing a joint return or a court-appointed personal representative filing an original return for the decedent you do not have to file a Form 1310. Court certified representatives must attach a copy of the court documents stating the appointment to the tax return.

As for signing the actual return, an appointed personal representative must sign and if it’s a joint tax return, the surviving spouse must also sign.

If you are the surviving spouse and there is no appointed personal representative, you need to sign the tax return and write “Filing as surviving spouse” in the signature area.  Surviving Spouses can file a final joint return in the tax year in which the death occurred.

If there is not an appointed personal representative and no surviving spouse the person in charge of the decedent’s property must file and sign the tax return as a “personal representative.”

You can use this handy link to find out if you even have to file the deceased’s tax return Do I Need to File a Tax Return?

PJF Tax Man

PJF Tax, 3131 Fernbrook Ln N., Suite 324, Plymouth, MN, 55447, United States

PJF Tax Man is a cartoon tax preparer. Although he is fictitious he is an expert in all things tax. He has been preparing taxes forever and will continue to do so in the future. Hail PJF Tax Guy!