The old “nothing is certain but death and taxes” quote attributed to Ben Franklin likely crossed your mind when you learned that as an executor of the estate of someone who recently died, you need to file at least one final income tax return on their behalf.
If you are the surviving spouse, the process is fairly uncomplicated, On your joint return, you write “Filing as surviving spouse” on the signature line. If you are the executor of the estate but not the spouse, you must file IRS Form 56 with the return to show that you have the right to file on behalf of the deceased.
Collecting the necessary documents
Let’s say the person already filed their 2021 return. While you have some time before the 2022 return is due, you can start collecting the necessary documents, like their 1099s, W-2s and previous tax returns. You may need to provide a copy of the death certificate and proof of your right to access the information.
Remember that they could still have earned the income that’s due to them. There may be medical bills and other deductible expenses yet to come in. Don’t assume you have all of the information you need before you do.
If the deceased person didn’t file a return for 2021 – perhaps because they were hospitalized or otherwise incapacitated — you’ll need to deal with that one first. If they had an accountant or other tax preparer, they should be able to offer assistance.
Don’t confuse income taxes with estate taxes
Remember that filing income taxes for a deceased person isn’t the same as filing estate taxes. The estate itself may owe taxes if its value is over $12.06 million.
Every situation is somewhat unique. Therefore, it’s always wise for executors to have sound tax and legal guidance as they deal with tax issues during estate administration. This can help you prevent unnecessary fees and penalties and help the process go more smoothly.