Being appointed the executor of an estate comes with many duties, some of which you may not even be aware. For example, one of your duties as an executor is to file income tax returns for the deceased and possibly for their estate. These are two different returns that are filed separately.
Personal income tax returns
Regarding the personal income tax return for the deceased, you may be able to obtain all the information you need about income, past taxes paid and deductions in the deceased’s personal papers, if they were organized enough in their estate planning to retain these records. If they were not, don’t worry. The Internal Revenue Service (IRS) can give you copies of the deceased’s W-2, 1099, past tax filings and transcripts.
Estate income tax returns
The income tax return for the estate is a bit different. An income tax return for the estate must be filed if the estate earns more than $600 in income per year. This income may be in the form of interest, dividends or profits made from renting real estate. It also includes any business the deceased owns at the time of their passing.
Note that the income tax return for the estate is not the same as an estate tax return. Estate tax is the tax imposed on the transfer of estate assets to heirs, not the income of the estate itself. Not every estate is subject to the estate tax.
Filing any tax return as an executor can be complicated and most people do not know how to do it on their own. Fortunately, estate planning attorneys are familiar with the duties of an executor and may be a useful resource for those with questions about taxes and estate administration.
