Tax returns for the deceased

Two things are certain in life - death and taxes. Here's what to do if the two are combined for the presentation of a tax return.

Tax returns for the deceased

If a person dies, their finances are immediately converted into something called a farm. The company is then responsible for submitting the tax return that covers finances including income and distributions to heirs and legatees. However, a final personal income tax return must still be filed for the deceased.

The final personal income tax return for the deceased is known as Form 1040. Yes, you have the same tax form as you would for any personal tax return. It 'hard to believe that the IRS gave up the opportunity to create another form, but there you go. Miracles happen.

In determining the income and tax payable for a person dies, the date of death is the cutoff. All income earned before that date for the year goes on personal tax return. All income earned after death is the responsibility of the estate and will be reported on the estate tax return.

Regarding deductions, there is good news. Regardless of the time of year when the sad event occurs, you can claim the deduction for the entire year and all other expenses that occur before death. In other words, one must not calculate any relations based on the number of months have elapsed. If someone comes in February, you still get the full write-downs for the rest of the year.

When a person dies, an executor or trustee will be responsible for their properties. The exact name depends on what kind of estate planning are done. However, this person will sign the tax return and notice the person is deceased. This should take care of everything with the exception of IRS estate tax return.

What happens if the deceased is due a tax refund? In such a situation, the IRS will not just kick a refund unless the deceased was married. If married, the refund is sent to the spouse. Otherwise, you must file a Form 1310 to obtain a refund. This form basically says you are claiming a refund, have the right to do so and fulfill the IRS of any involvement in subsequent litigation....