Death and Fiduciary Tax Services
Scappoose Business and Tax Service, inc. is here to assist local businesses with their bookkeeping needs
Even the dead pay taxes. While it’s an ominous reality that many of us do not like to consider, when we pass either suddenly or with some level of warning, there is certain paperwork that must still be filed and accounted for after our deaths.
Taxes may be levied upon the estate of an individual until all items and monies have been distributed to the descendants, heirs, trustees, and charities as prescribed in the will. If you have been named as an executor of a will, this means the responsibility of maintaining the maintenance and books related to the estate falls on you to keep.
In a time of grief, having to maintain and juggle so many different pieces of paperwork may be unnecessary stress. Incorrect documentation can impact inheritance payouts, putting an strain on the surviving loved ones. Having a tax consultant to ensure paperwork for the deceased is properly followed regarding income, assets, and business can help speed up the process of getting all items paid out and relieve the burden of too many decisions for the executor.
What is a Fiduciary Tax?
The fiduciary tax is the tax assessed upon an estate that has not been fully distributed. When a person passes, they sometimes leave behind trusts and property. Property that needs to be sold produces an income for the estate. Trusts may be connected to stocks and bonds, which cause the funds to grow over time. Form 1041 is used to report this income until the estate and trusts have been fully disbursed to their recipients.
Do I have to file a return?
If you have been labeled the executor of a will or are the next of kin i.e spouse or parent of an individual who passed away, then you may be required to file a tax return on their behalf. Estates that may produce income over time prior to disbursement may require multiple filings over the course of years.
Contact us with questions about filing taxes after death.
My spouse recently passed away. Does this change my joint filing status?
You should still select a joint filing status after the passing of a spouse, if this is how you have previously filed taxes. When filing your spouses’ taxes, you will need to provide a death certificate and notify the IRS that the tax return is being filed for a deceased person.
Contact us with questions about filing taxes after death.