Losing a loved one is never easy. It can be an extra challenge when you are facing needing to file taxes for the deceased. This responsibility will usually fall on the surviving family members, like a spouse, or a designated, personal representative.

Understanding the process and getting professional tax assistance can make a huge difference, releasing you from some of the burden during this time of grief.

Understanding the Final Tax Return

After a loved one has passed, it’s important to file their final income tax return. This must cover January 1st of the year they passed through the day of their death.

Usually this return is reported and filed using Form 1040 or 1040-SR by the surviving spouse or personal representative of the deceased. If you are unsure of or confused by the process, you should find a local accountant to help you navigate the steps.

Steps for Filing the Final Tax Return

When filing taxes for the deceased, there are a number of forms and additional steps that must be completed in order for all the information to be properly reported and collected.

1. Gather Necessary Documents

Before filing taxes for the deceased, you will need to gather the right documents. This will usually include:

• Form 1040 for the final tax return
• Form 1040-SR (if the deceased was a senior citizen)
• Form 1310
• W-2s
• 1099s
• Proof of claim
• Medical expense receipts
• Any other income statements, deductions, credits, etc.

Ensure that you also notify the Social Security Administration of the individual’s death and ensure they issue a final Social Security statement.

2. Determine Filing Status

When filing, you will need to select the appropriate filing status. This will either be “Single” or “Married Filing Jointly” (MFJ), based on the individual’s marital status at the time of their death. 

As long as the surviving spouse did not remarry within the year after death, then they can still file as MFJ.

3. Report Income & Deductions

Next, when filing taxes for the deceased, all income and deductions should be reported. This includes all income received up through the day of death, and any applicable deductions and credits.

Some common credits include medical expenses, charitable donations, and mortgage interest deductions.

4. Note Date of Death

It’s important to also include a note that indicates that the individual has passed. If the taxes are being filed in a paper copy, indicate “Deceased” at the top of Form 1040. If filed electronically, follow the tax software or website’s instructions.

You should also include the day of death so the IRS can process the information and return correctly.

5. Sign the Return

In order to properly process the return when doing taxes for the deceased, the return should be signed. If the taxes are being filed by a personal representative, then they would sign.

If you are a surviving spouse, then you can sign the return.

6. Claim a Refund

If after completing taxes for the deceased there is a refund due, then Form 1310 should be included (Statement Claiming Refund Due a Deceased Taxpayer), unless you’re a surviving spouse filing a joint return.

This will ensure that the refund is received by the appropriate person.

Potential Additional Filings

There are some instances where additional forms should be included in the filing process. These include:

• Estate Income Tax Return (Form 1041) — If the deceased individual’s estate or property continues to bring in income after their death (i.e. investments or rental properties) of over $600 in gross income, then this form must be filled out and included.
  
• Estate Tax Return (Form 706) — If the deceased’s estate exceeds the federal estate tax exemption threshold, you will need to fill out this form. This threshold can change, so ensure you check with a tax professional.

Why Seek Professional Assistance

Taxes can be complicated, detailed, and confusing for anyone; there’s risk of accidental errors that could lead to penalties or delays.

But especially when handling taxes for the deceased, it can be difficult to navigate unknown processes while dealing with the grief. That’s why it’s important to get all the support you can in this challenging time.

GSR: Your Trusted Advisors

At Golub, Senitt, Rosenberg & Co. (GSR), we have had years of experience with a wide variety of clients, providing them tax help that is professional, thorough, and sensitive. Our certified public accountants (CPAs) are qualified and willing to work with you and make the process stress-free.

Some of our tax services include:

• Personal Tax Preparation – Assistance for individual filing & preparation
• Tax Planning – Strategies & advice for minimizing tax liability & ensuring tax law compliance
• Tax Management Consulting – Guidance on managing tax obligations, including transitional times for a loved one’s property

If you are needing to file taxes for the deceased, reach out to us today to let us know how we can support you during this process.