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My mother (who was single senior) died in the fall, and I am planning on doing her final income taxes. I wanted to know if there are any expected difficulties, "gotchas", or anything special I should know. I do my/wife's own taxes using TaxAct.com and state web sites, and find it relatively straightforward (though monotonous), but I've never done taxes for a decedent.

I'm aware of the IRS guide for doing a decedent's taxes, but that is a lot to slog through, and I find the insights offered here generally excellent, so I'm asking here.

Some info, if helpful:

  • No estate taxes: Her estate's total value is under both the federal level and this state's level, so there should be no estate taxes.

  • What we've done: She died in the fall but essentially no actions have been taken other than probating her will, setting up an estate bank account, and paying her medical bills as they dribbled in (some as late as 6 months post death!). We have received no money from the estate yet, her house has not been put on the market (I am living in it and paying all bills/taxes during this time). One of my sibling's took her share of an annuity, but two of us have not yet done that.

  • Her 2015 income: She worked part-time in 2015, and also earned some small amount of bank interest. She also got social security, and was on a Medicare Advantage health care plan. She received state disability income for about a month near the end (since she had been working but had to stop due to her illness). She also had some annuities but was not a stock investor. Her house was paid off. I don't think she usually itemized her deductions. Her previous taxes are all here.

I am hoping I can just do her taxes through TaxAct.com as well, checking off the "deceased" checkbox and basically have it also be fairly straightforward, but I am unsure what other concerns might crop up. I need to start very soon (obviously!). Thank you.

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There are two different tax returns you'll be doing: one is for her, until the day of her death. The other is for the estate.

The personal one you could probably do on your own, it's nothing different from the one for a living person, except for the cut-off date in the middle of the year.

The estate tax return may be a bit more nuanced, since it is a trust return and not an individual return, and is done under a different set of rules.

I'd suggest talking to a tax professional who'd help you. Your estate executioner should be doing the estate tax return (or hiring someone to do it).

Sorry for your loss.

  • Thanks. Two questions. One, what do you mean by the cut-off date in the middle of the year? Two, if her estate value is well under both the federal and this state's cut-off, do we still have to file an estate return? – Manbatton Apr 2 '16 at 6:43
  • @Manbatton any income received after her death - is no longer her income, it belongs to the estate. Thus her tax return will only include the income until her death, and the estate tax return will include the income after her death (like interest or dividends on her accounts distributed after her death, etc). I'm talking about the estate income tax, not the estate tax which is a different thing. – littleadv Apr 2 '16 at 19:04

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