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Filing Taxes for a Deceased Parent

Posted on Wednesday, August 30, 2023
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by AMAC, D.J. Wilson
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pen on top of a 1040 tax form

A difficult task

In life, there are some difficult tasks. Among them is dealing with the death of a loved one, in particular a deceased parent. When people die, they aren’t exempt from filing taxes. Upon a taxpayer’s death,  responsibility for filing a final return generally falls to either a surviving spouse or appointed representative. In the case where there isn’t a surviving spouse, descendants of the deceased are frequently selected to legally handle affairs, including filing taxes for a deceased parent.

The IRS; the grim reaper of taxes

Tax debt is not forgiven upon death. Generally, the IRS expects a final tax return for a decedent to be filed; meaning they require an income tax return for an individual in the year of said taxpayer’s death. When completing the return, the filer is asked to write “Deceased” at the top of the first page. They must also provide the date of death. In the case of complex tax situations, it is best to hire a tax professional such as a CPA who is knowledgeable in ever-changing tax law.

Who pays taxes due for a deceased parent?

Typically, if a taxpayer dies and has tax debt related to a jointly filed return, the surviving spouse is liable. Otherwise, the estate is responsible for unpaid taxes. When filing a return on behalf of a deceased parent, all income must be reported up to the date of death. Likewise, all eligible credits and deductions may be taken. If a deceased parent owes taxes from previous years or failed to file taxes in years prior to their death, the estate representative is responsible to file the return showing income, investment interest, retirement accounts, and Social Security payments if applicable. If the estate is insolvent, and there is no money to be distributed at all, taxes are generally uncollectible. However, if there is money to be distributed in an estate, taxes must be paid first.

DIY or hire a professional?

Should a representative of the deceased prepare a final tax return and make a serious mistake, they risk being held responsible. Thus, for complicated returns, or in the case where someone is unfamiliar with doing taxes, it may be best to seek professional help. Specialized help may also be favorable where emotions run high and may interfere with one’s ability to adequately handle paperwork for the deceased. A CPA is an individual who is qualified to prepare taxes and possesses extensive knowledge in the field. Additionally, these professionals are required to do annual continuing education to remain up to date on tax laws and changes. When using a tax professional to file a tax return for a deceased person, the tax filer must be fully prepared to show proof that one is indeed the court appointed representative. To learn more about documentation for filing taxes for someone who has passed, visit our related article here.

Sharing the truth

Filing taxes for a deceased parent can be a difficult experience. However, emotions aside, it is a necessary task that should not be ignored. Should the party responsible for the tax return fail to file, the estate and beneficiaries will likely be financially liable for unpaid taxes. Or valuable refunds can be missed. Understand that the IRS does not forgive what’s due upon a parent or deceased person’s death. They will follow through to collect what’s owed.  

This article is purely informational and is not intended as a substitute for professional advice.

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