Using Form 1041 for Filing Taxes for the Deceased
If you have a family member who died recently, you might be required to file a tax return for them.
When Should You Report Income When Filing Taxes for Deceased Individuals?
When filing taxes for deceased individuals, you should report income earned from the beginning of the year to the date of death on that person’s death.
All information should be reported on a income tax return (Form 1040), which is due on April 15 each year (unless the date falls on a weekend or the federal date is changed by the IRS).
Then, follow the steps listed below to fill out a Form 1041 for any additional income received after the date of the death of the individual.
More Information on Estate Income Tax Returns
A legal entity called an estate is automatically created at the time of death to file a tax return, even for deceased individuals with no estate prior to death. This helps to keep track of all income the deceased earned until the final distribution of assets to heirs and beneficiaries.
Enter IRS Form 1041
Estate income tax is documented on IRS Form 1041. This form reports any income the estate earned after the date of death. This includes income earned from bank accounts or stock while the estate is being managed through a process called probate.
Is An EIN Necessary for Filing Form 1041?
The personal representative must request an employer identification number (EIN) to use for filing purposes on Form 1041.
Many assets, like a life insurance policy or a brokerage account, list a beneficiary. If they do, these assets can avoid probate and be paid directly to the beneficiary. Interest earned on these assets after the death of your family member is taxable.
If money is earned or accrued before the death of your family member, and the money is paid after the death, it is considered income in respect of a decedent (IRD). This money can be taxed to one of the following people:
- The beneficiary may have to pay tax on the IRD if the right to the income passed directly to the beneficiary and the beneficiary received the income;
- The decedent’s estate may have to pay tax on the IRD if the estate received the income; or
- Any beneficiary picked by the estate may have to pay tax on the IRD if the estate distributed the right to the income.
If the deceased would have paid tax on income on amounts from these accounts, they’re also IRD:
- Inherited IRA
- Retirement plan
- Certain other assets
Who Should File an Estate Income Tax Return?
The fiduciary who files an estate income tax return for the deceased can be:
- An executor
- An administrator
- Personal representative
- Anyone in charge of the deceased family member’s property
More Tips on Completing the 1041 Tax Form as a Surviving Spouse
Read on to learn more about filing the 1041 tax form for a deceased individual with an estate.
Enter “Filing as surviving spouse” in your spouse’s signature area if you are a personal representative. Then, sign in your own signature area.
Filing Taxes for a Deceased Dependent
So, after filing taxes for a deceased dependent, you are probably wondering if you can claim them on your taxes. Here is the answer: you can claim a deceased family member as a dependent if both of these apply:
- The deceased lived in your home while alive (temporary absences still qualify)
- The deceased met all the requirements to qualify as a dependent
The above case is rare, however.
Also, the deceased dependent might have qualified you for benefits. If so, you can still claim the benefits in the year your dependent died. To do so:
- File as head of household
- Claim the tax deductions or credits you qualify for
Help With Filing Taxes for Deceased
Talk to H&R Block if you need any help filing taxes for deceased members of your family. Make an appointment with one of our knowledgeable tax pros at H&R Block. You can count on our tax pros to guide you in making the right decisions for your unique tax situation.
Read the IRS definition of a business payment plan (installment agreement) and get more insight from the tax experts at H&R Block.
Learn more about notice CP12A, why you received it, and how to handle an IRS CP12A notice with help from the tax experts at H&R Block.
Learn more about Letter 3853C, why you received it, and how to handle an IRS 3853C letter with help from the tax experts at H&R Block.
The IRS adjusted your Shared Responsibility Payment and you owe taxes. Learn about notice CP22H and how to address it with help from the experts at H&R Block.