Tax Savings

When Is An Estate Tax Return Due?

Note: When a taxpayer dies, they may still have to pay federal income tax on income earned during the year. Anyone can file an income tax return, possibly including an inheritance return, on behalf of the deceased.

When Is An Estate Tax Return Due?

When you lose a loved one, taxes may be the last thing on your mind. But the task of filing the final tax return of a deceased person may fall on the shoulders of a family member or friend.

There are two types of taxes owed by an estate. We will continue with the estate tax. The estate tax is transfer of assets from decedent to their beneficiaries and heirs.

This article contains basic information about estate tax to help you understand when an estate is required to file.

When to file?

Nine months after death is considered due date for the estate tax return. You can have six-month extension if you have requested prior to due date and estimated correct amount of tax is paid before the due date.

Deceased Taxpayers – Filing the Estate Income Tax Return, Form 1041

When someone dies, their assets become property of their estate. If this asset generate any income, so it can create a need to file an estate income tax return. Saving accounts, stocks, bonds, mutual funds and rental property are examples of those assets that generate an income.  If the estate generates more than $600 in annual gross income it is required to obtain IRS Form 1041, U.S. Income Tax Return for Estates and Trusts.

The decedent and their estate are separate taxable entities. You will need to obtain a tax ID number for the estate before filing Form 1041. “employer identification number,” or EIN can be obtained online or apply by fax or mail.

As an individual`s income operates, the decedent`s estate figures its gross income in the same way. But the major difference is that decedent`s estate is allowed an income distribution deduction for distribution to beneficiaries.

For calendar year estates and trusts, file Form 1041 and Schedule(s) K-1 on or before April 15th of the following year. For fiscal year estates and trusts, file Form 1041 by the 15th day of the 4th month following the close of the tax year. You can request more time by applying automatic 5 month extension of time to file using IRS Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns.

By using IRS Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return you can report estate tax on the transfer of assets from the decedent to beneficiaries and heirs.

What tax returns might I need to file for someone who has died?

Final Form 1040

If your loved one earned income in the year they died, then you may need to file a 1040 Form on their behalf. Deceased person`s Form 1040 is federal income tax return. It is typically due April 15th every calendar year.

Estate income tax

We have discussed above.

Form 706 estate tax return

In some cases, additionally to income tax another type of tax can be levied. Death tax or estate tax applied to estates worth $11.58 million or more.

How can I avoid being fined for underpayment of federal income tax?

Generally speaking, it is possible to avoid being fined by making payment at min 90% of the total tax to owe for the current tax year.

How do I file tax returns for a deceased person?

Here’s an overview of what to consider when filing tax returns for someone who has died.

File the final Form 1040

The period that covers final Form 1040 starts from January 1st of the year in which the person died until the date of death. You have to file and pay any taxes due by the standard tax filing deadline (as a rule   April 15th) of the next year. In case if you haven`t enough time, you are able to ask for an extension of time to file that Form.


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