Estate Tax Return Preparation

If you are the executor of someone’s estate, you may need to file an income tax return for the estate. You may also need to file a final personal income tax return for the deceased person. The deceased’s estate is a separate legal entity for federal income tax purposes.

As the executor, you will need to file an income tax return, or Form 1041, for the estate, trust, or bankruptcy estate, if they have a:

• Gross income for the tax year over the annual qualifying amount or a
• Beneficiary who is a nonresident alien

Common examples of income produced by an estate are rents from real estate in the estate. Another example is salary that wasn’t paid to the deceased person before death, or interest on an estate bank account.

However, if you promptly distribute all the estate assets to the people who inherit them, the estate may not have income, and you may not need to file an income tax return for it.

Income tax return Form 1041 is also called a fiduciary tax return because you file it in your capacity as executor of the estate. One of our team members can help you file under the name and taxpayer identification number of the estate. As for the deadline for filing, the estate’s tax year begins on the date on which the deceased person died. You, as executor, can file at any time up to 12 months after the death.

An estate tax is different. This pertains to only large estates exceeding the annual qualifying amount, and it requires the filing of an estate tax return. And Form 706 is filed by an executor of a descendant’s estate to figure the estate tax imposed by Chapter 11 and the generation-skipping transfer (GST) tax imposed by Chapter 13. It’s also filed for employment taxes on wages paid to household employees.

If you would like to sit down with us to discuss how we can help with your tax and accounting needs, contact us for a free consultation.