When a person passes away, their family is left to deal with their affairs. These affairs include paying their taxes. Filing taxes for deceased family members doesn’t have to be complex, though. Let’s look at what types of taxes you may need to pay.
Types of Taxes the Deceased May Owe include:
Final Income Taxes:
This is the deceased’s 1040 tax income form for work they’ve received payment for during that year. Unless they died on Dec. 31 of the past year, they may still owe income tax for the year in which they died. As the family of the deceased, the executor of the will or the administrator of the estate will draw up these tax forms and submit them to the Federal and state governments.
Estate Income Taxes:
If the person who dies continues earning money after death, this means that their estate earns income. Many individuals may make passive income on rental properties or investments that will continue after their death. In this case, the executor or administrator will need to file an estate income tax return 1041.
You’ll need to use tax rates and tables to determine how much the estate owes the Federal and state governments. However, if the person doesn’t have any earnings after their death, you will not need to file a 1041 estate income tax return.
Death or Estate Taxes:
These taxes are rare. The deceased must have an estate worth more than 11.7 million before you would need to pay these taxes using Form 706.
Let us know if you have any questions about filing taxes for deceased loved ones. We are happy to help with all estate administration issues, including taxes, reports to the probate court, estate inventory issues, will problems, and more. Contact us and find out how we can help you today!