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Filing estate taxes


You may be required to oversee filing a federal estate tax return and/or a state estate/inheritance tax return.

You may also be responsible for filing the final personal federal income tax return, plus any state income tax returns, by the IRS filing deadline of the year following the death. Additionally, you may need to file an estate income tax return. Work with a tax advisor to monitor filing requirements and deadlines.

IRS rules state that a final income tax return is required if the decedent met normal filing requirements at the date of death. In all likelihood, if your loved one filed tax returns in the past, a final return should be filed with the IRS and the state tax authorities, if applicable.

A final return includes a decedent's income from January 1 to the end of death. The return is due by the April IRS filing deadline in the year following the taxpayer's death. If an executor is involved in settling the estate, they usually take the responsibility of filing the tax returns.

If no executor is involved, a surviving spouse or family member should make sure to file the returns.

Estate tax laws are separate from income tax laws. An estate tax return is required to be filed only if the estate meets specific IRS criteria. The size of the estate, in terms of dollar value, is one criterion. Most relatively simple estates do not require the filing of a federal estate tax return.

A filing is generally required for estates with combined gross assets and prior taxable gifts exceeding the exclusion amount (adjust yearly). Also, regardless of the size of the estate, a timely return is required to transfer any unused exclusion amount to the surviving spouse.

For more information, consult with a tax attorney or tax advisor, and review IRS Publication 559 Survivors, Executors and Administrators at www.irs.gov.