When a spouse or parent dies: the final return and what comes after
One last individual return covers the year of death, someone has to sign it, and a separate return begins only if the estate itself earns enough income.
Quick answers
- Does a tax return still have to be filed for someone who has died?
- Usually yes. A final individual return covers the year of death and reports what the person received before dying. Whether it is required follows the same rules as for anyone else.
- Who signs the final return?
- An appointed personal representative signs it, and a surviving spouse also signs a joint return. With no representative, the surviving spouse signs and notes that they are filing as surviving spouse.
- Does the estate need its own tax return?
- Only if it has gross income at or above the threshold for the year, or has a nonresident alien beneficiary. Estate income means what the assets earn after the death, not the assets themselves.
A final individual return is due for the year someone dies, covering the income they received up to that point. A second, separate return begins only if the estate itself earns enough income after the death.
Who is responsible
The IRS calls the person who handles this the personal representative, and the description is broad: an executor named in a will, an administrator appointed by a court, or anyone else who is in charge of the person's property. That role carries the job of filing any final individual return when it is due. There is no separate deadline for a final return; it follows the ordinary due date for that tax year, which when you can file and when it is due sets out. Form 56, Notice Concerning Fiduciary Relationship, is how you tell the IRS that you are acting in that capacity.
What goes on the final return
The accounting method the person was using at the time of death decides what belongs on the return, and almost everyone uses the cash method. On that method, the final individual return shows only the income they actually or constructively received before death — money that reached them, was credited to their account, or was made available to them without restriction — together with deductions for expenses they paid before death.
In practice that draws a clean line at the date. A pension payment made in January for December is not on it. Interest credited to a savings account before the death is on it, whether or not anyone withdrew it. What the assets earn after that date belongs to the estate rather than to the person.
Who signs, and what to write
Where a personal representative has been appointed, that person signs the return, and on a joint return the surviving spouse signs it as well.
A surviving spouse filing a joint return where nobody has been appointed signs alone and writes "Filing as surviving spouse" in the signature area. Where there is no appointed representative and no surviving spouse, the person in charge of the property files the return and signs it as personal representative.
One more marking goes on the front of the return in every version of this. Check the box marked Deceased, and write the date of death alongside that word, on the line that sits above the name.
The refund, and Form 1310
Where the final return produces a refund, Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, may need to go in with it. Two people are excused from it. A surviving spouse filing a joint return does not file it. Nor does a personal representative appointed or certified by a court, who instead sends the original return in with proof of that appointment from the court itself. Anyone else claiming the refund files the form. How refunds work covers what happens after that.
Filing status for the years after
A surviving spouse can file joint returns for the year in which the death occurred, and for the year immediately before it if the death happened before that earlier return was filed. After that, qualifying surviving spouse status can run for the two following years where there is a dependent child and the other tests are met. It is not automatic, and the tests are specific about the child and about the cost of keeping up a home. Filing status sets them out in full.
When the estate needs its own return
The estate is its own taxpayer. A domestic estate files Form 1041 for any tax year in which what it earns reaches $600, and it must file regardless of income if any beneficiary is a nonresident alien.
Estate income means what the assets earn after the death: interest, dividends, rent collected after the date of death, a gain on something the estate sells. The assets themselves passing to the people who inherit them are not income and do not count toward that threshold. Where a Form 1041 is filed, the personal representative also files a separate Schedule K-1 for each beneficiary with it, and gives each beneficiary a copy by the date the Form 1041 goes in.
What this article does not cover
Inherited retirement accounts run on rules of their own about who may hold them and how fast the money has to come out, and Form 1099-R is where those distributions turn up. An inherited house generally resets its basis to the value at the date of death, which is the most useful thing to know before selling it. The federal estate tax is a separate return again, and one that very few estates ever have to file.
None of those are settled here. Where an estate holds property, a business, or beneficiaries in more than one state, an hour with a preparer earns its cost, and there is usually more time to arrange that than it feels like there is.