When a taxpayer passes away, a representative will be named or appointed to take charge of that person’s property and financial responsibilities—including filing tax returns and ensuring that taxes owed are paid in a timely fashion. Have you recently found yourself representing a deceased relative during tax season? Here are a few things you’ll need to know.
For the decedent’s final tax return, income must be reported up to the date of death. Medical expenses prior to death can be claimed as deductions on the tax return, as can medical expenses paid out of the estate funds within a year after the death. If the decedent owned capital assets, the total value at the time of death will need to be determined in order for you to file Form 706, which determines the tax on the value of the estate’s assets. You may also need to hire a professional to appraise the decedent’s property, in order to determine relevant taxes.
It can be overwhelming and upsetting to deal with tax matters following the death of a loved one. Luckily, you don’t have to go through it alone. Taxation Solutions, Inc. is standing by to assist you with any tax advice and resolution services you require. We’ll guide you through the process of filing the deceased’s final tax return and ensuring that everything is IRS compliant, so you can move forward. Call us today!