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Mistakes in filing a decedent’s final tax return can be costly

On Behalf of | Mar 9, 2023 | Tax Law

That Benjamin Franklin quote, “In this world nothing is certain but death and taxes,” is likely running through your head if you’re filing a 2022 income tax return for someone who passed away last year. The named executor of the estate is required by law to file this return unless there’s a surviving spouse who’s not the executor.

If you’re the surviving spouse and you’ve been filing joint returns, you will file the return as usual, sign it and write, “Filing as surviving spouse” on the other signature line. If you are the executor of the estate, but not the surviving spouse, you’ll need to submit a return for the deceased along with the IRS form “Notice Concerning Fiduciary Relationship” (Form 56) that shows your authority to file the return.

Seeking an extension to gather the needed documentation

You might assume that the IRS automatically provides extensions for deceased taxpayers’ forms. It doesn’t. You’ll likely get an extension if you ask for one, though, so it’s best to do that as soon as possible so you have enough time to gather the documents and other information you need.

If the deceased filed their taxes with a tax professional or even used an online site, it will be easier to determine whether they’re up-to-date on their filings and see what sources of income they reported in previous years. Having last year’s tax return is important. You’ll also want to collect their income documents like 1099s and W-2s. 

If you’re not able to locate one or more of the documents you need, you’ll have to get copies. This will take additional time, of course.

Why you shouldn’t go it alone

It’s best to consult with a professional tax preparer (even if the decedent didn’t have one) to help ensure that you don’t miss anything and that the return is filed correctly. If the estate is very large, you may also need to deal with estate taxes.

As the executor, you can be held personally liable for any unpaid taxes. Therefore, it is wise to also have some legal tax guidance so that you can avoid unnecessary and costly errors.