Tax - Who is Responsible for Filing the Return when a Taxpayer Dies?

In general terms, it is the personal representative of the deceased who has to complete the tax duties and responsibilities of the latter.

That person is usually responsible for filing not only the income tax return but also the estate tax return of the deceased, if required.

He or she may also request an extension for the filing of a tax return on behalf of a decedent.

Who is a personal representative?

A personal representative can be any of the following persons:

1. An executor or executrix who was named in a decedent's will to administer the estate and oversee the distribution of the included assets according the stated wishes of the deceased.

2. An administrator or administratrix appointed by a court of law, IF

- no will exists
OR
- the will does not name an executor or executrix
OR
- the named executor or executrix is unable to serve in that capacity.

3. If none of the above authorized representatives exists, the surviving spouse who is eligible to file joint return.

4. If no personal representative has been appointed and there is no surviving spouse, the person in charge of the decedent's property.

What is the filing status of a deceased person?

Filing status of a deceased taxpayer depends on whether the decedent was considered single or married at the time of death.

If the surviving spouse remarried before the end of the year of the decedent's death, the filing status of the decedent is married filing a separate return.

When to file a return for a deceased taxpayer?

Depending on when the death of the taxpayer occurred, a personal representative may have to file tax return on behalf of the decedent not just for one year but for two consecutive years.

A. If the death occurred during a tax year and the deceased person had paid the previous year's taxes it is just a matter of filing a return for the tax year in which the death occurred.

Here there is only one year or the final year of taxes to be paid.

Example:

Death of a taxpayer occurred on or before 31 December 2010 and he or she had paid the taxes for 2009. Here the taxes owed are only for 2010.

B. If the death occurred before the date the decedent's return for the immediately preceding year was due,

First, the representative will have to file a regular return during the current tax season for the taxable year immediately before the year of death - tax for the preceding year.

Then, the representative will file for the tax year of death during the following tax season - tax for the final year.

This happens because the death occurred after last day of the previous year but before the last filing date in the April of the current year.

In other words, the death occurred during the filing season of the current year, so he or she could not file a return for the past year.

Example:

Taxpayer had already paid the taxes for 2009. Then he or she dies after 31 December 2010.
Death occurs before the April 2011 tax deadline and that person could not file a tax return for 2010.

Here the taxes owed are for two years and the representative will have to file two returns in consecutive years:
1. Tax due for the tax year 2010 payable on or before the April deadline of 2011 (tax for the preceding year).
2. Tax due for the tax year 2011 payable on or before the April deadline of 2012 (tax for the final year).

How to file for a deceased tax payer?

A tax return for a decedent can be filed electronically or by mail.

The filing requirements are usually the same as those that apply to living individuals.

Similarly, the accounting method used by the deceased will determine what is included or excluded from the filing. For example, the dates of credits and debits will vary depending on whether that person was using the cash method or accrual method of accounting.

Special Instructions for filing tax returns on behalf of a deceased person

1. At the very top of the return, the filer should write the following information:
The word "DECEASED," the decedent's name, and the date of death.

2. The word "DECEASED" should be added to the decedent's name in the name and address section of the final return.

3. Personal representative must attach a copy of the court certification to prove that they are authorized to act on behalf of the deceased.

Claiming a refund on behalf of a deceased taxpayer

If the deceased had actually overpaid any tax, he or she is owed a refund.
Remember, no filing, no refund. So even if no taxes are owed, a return should be filed to get a tax refund.

Tax Form 1310,Statement of Person Claiming Refund Due a Deceased Taxpayer should be filled and attached to the return.

The following representatives need not file Form 1310
- surviving spouse filing a joint return for the deceased person
- a court appointed or certified personal representative filing an original return for the decedent,

Signing the return for a deceased person

Some additional entries will be needed while signing the return for a deceased person.

1. When signed by the surviving spouse who is eligible to file a joint return.

In this situation, the name and address of the decedent and the surviving spouse should be written in the respective name and address spaces.
The words "FILING AS SURVIVING SPOUSE" should be added in the signature area
As noted already, the word "DECEASED" should be added to the decedent's name .

2. When signed by a person in charge of the decedent's property

This filer will sign the return and add the words "PERSONAL REPRESENTATIVE" in the signature area.

Need you attach a Death certificate to the return?

While death certificate or other documentary proof of death is not attached at the time of filing a return for a deceased person, such documents should always be kept in the filer's records. The filer can be asked to provide the proof anytime on a future date.

PLEASE NOTE: The scenarios mentioned here assume that the deceased person had a clean tax record and had no tax owed in arrears at the time of death.
This article is an introduction to the subject. For the latest and definitive information, always consult the resources provided by the Internal Revenue Service (IRS).