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Tax Returns For The Deceased
By: Richard Chapo
Two things in life are certain – death and taxes. Here’s what to do if the two
are combined as far as filing a tax return.
Tax Returns for the Deceased
If a person dies, their finances are immediately converted into something called
an estate. The estate is then responsible for filing a tax return covering the
finances including income and distributions to heirs and beneficiaries. However,
a final personal tax return must still be filed for the deceased.
The final personal tax return for the deceased is known as Form 1040. Yep, you
file the same tax form as you would for any personal tax return. It is hard to
believe the IRS passed up an opportunity to create another form, but there you
go. Miracles do happen.
When determining the income and taxes due for a person who passes away, the date
of death is the cutoff. All income earned before that date for the year goes on
the personal tax return. All income earned after death is the responsibility of
the estate and will be reported on the estate tax return.
As to deductions, there is good news. Regardless of the time of the year when
the grim event occurs, you can claim the full deduction for the year and any
other expenses that occur prior to death. Put another way, you don’t have to
calculate any ratios based on the number of months that have passed. If someone
passes away in February, you still get the full write-offs for the rest of the
year.
When a person passes away, an executor or trustee will be in charge of their
estate. The exact designation depends on what type of estate planning they did.
Nonetheless, this person will sign the tax return and note the person is
deceased. This should take care of everything with the IRS excluding the estate
tax return.
What happens if the deceased is due a tax refund? In such a situation, the IRS
will not just kick out a refund unless the deceased was married. If married, the
refund is sent to the spouse. If not, you must file a Form 1310 to get the
refund. This form basically says you are claiming the refund, have the right to
do so and absolve the IRS of any involvement in subsequent disputes.
About the Author:
Richard A. Chapo is with http://www.businesstaxrecovery.com - recovery of
business taxes through tax help and tax relief. Visit http://www.businesstaxrecovery.com/articles
to read more business tax articles
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