How many taxes does a deceased person need to file?

A deceased person may need to file one last income tax return.  But who signs the return?  The responsibility rests with the executor or personal representative.  In some situations there are three tax filings with the IRS; the individual income tax, an estate evaluation or transfer tax, and an estate income tax return.  There also could be three filings with MA Department of Revenue.

The individual income tax return is the same 1040 form that you filed.   It consists of the income that the person earned up to the death date.  That tax return is allowed a full year personal exemption and full year standard deduction, if not itemizing.

After a person is deceased, the earned income and any deductions are filed by the estate.  The personal representative of the estate files a form 1041, if the income is more than $600.

If ever you are in the situation of collecting the pieces of a deceased person’s tax puzzle,

• Locate a copy of the prior year return and use that as a guide to what is necessary
• Visit the IRS website to obtain an estate tax identification number
• Change each bank account from the social security number of the deceased to this new estate tax id
• Contact each mutual fund or brokerage investor to change the same identifying tax id
• Contact an attorney, if there is land or a home that
• If the estate is valued for more than $5 million dollars, a federal  Form 706 is due nine months after the person’s death.
• If the estate is valued at more than one million dollars, a MA706 is required.  Massachusetts has different estate tax rules than the federal government.