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Retired Military Finances 201: Do You Have to File Taxes for a Loved One Who Has Passed Away? Thumbnail

Retired Military Finances 201: Do You Have to File Taxes for a Loved One Who Has Passed Away?

Taxes Estate Planning

As you retire from the military and move on in life, your parents and other loved ones are doing the same. At some point, you'll need to deal with the passing of a parent. It's no fun and one of the least fun things is to take care of your parent's tax return.

If you’re wondering, “Do I have to file taxes for a loved one who has passed away?” the answer is “Yes.” Here, we’ll explore some of the intricacies of filing taxes for a deceased loved one and shed light on the key steps and considerations involved in navigating this complex process.

Understanding the Timeline

The first step in handling taxes for a deceased individual is to be aware of the timeline. The Internal Revenue Service (IRS) imposes specific deadlines for filing taxes, and this applies even in the event of a person’s passing. Typically, the tax return for the deceased is due on the same date that it would have been if they were still alive.

Filing the Final Tax Return

Filing the final tax return for a deceased individual involves gathering their financial information for the last year of their life. This includes income, expenses, and any deductions they may be eligible for.1 You will also need to provide the date of death.

If the deceased had not filed individual income tax returns for the years prior to the year of their death, you may have to file returns for those years as well. It’s your responsibility to pay any balance due and to submit a claim if there’s a refund.

If you need extra time to gather everything you need to file your loved one’s tax return, you can request an extension.

Responsibilities of the Executor

If there is an appointed executor for the deceased’s estate, this individual takes on the responsibility of managing all financial affairs, including tax matters. The executor is responsible for filing the final tax return and ensuring that all financial transactions are accurately reported.2

As an estate administrator, executor, or personal representative of a deceased person, you may need to request information from the IRS. According to the IRS, you can request the deceased person’s:3

  • Tax return
  • Tax transcript
  • Payoff information
  • Change of address

Estate Tax Considerations

In some cases, an estate tax return may be required, especially if the deceased individual had a substantial estate. Estate taxes are separate from the final income tax return and have their own set of rules and regulations.

An estate tax return, Form 706, must be filed if the gross estate of the decedent is valued at more than $12.92 million for 2023 or $13.61 million in 2024.4

Given the intricacies of tax laws and the potential complexities involved in filing taxes for a deceased loved one, it may be beneficial to seek professional advice. Certified public accountants (CPAs) and tax professionals can guide you through the process, ensuring compliance with tax regulations and minimizing the risk of errors.

Filing taxes for a loved one who has passed away is undoubtedly a challenging task. Understand what you need to do and seek professional advice, if needed, to successfully navigate this process.

Military Finances are Different

Everyone's parents age and eventually they'll pass away. That doesn't mean your finances are exactly like your civilian counterpart's. As an Active or Retired Senior Military Officer or NCO, you have unique benefits due to your military service. That's why we think your financial advisor/planner should be like you. Someone who has served in the military and understands those unique benefits. If you'd like to find out how we do things, use the button below to schedule a free initial consultation.

If you found this article useful, you might like the following blog posts:

Retired Military Finances 301: Congratulations! You're a Trustee

One Reason to Consider Moving Your Assets Out of TSP - Estate Planning

Retired Military Finances 401: What Are Grantor Retained Annuity Trusts (GRATs)?

  1. https://www.irs.gov/individuals/file-the-final-income-tax-returns-of-a-deceased-person
  2. https://www.irs.gov/individuals/responsibilities-of-an-estate-administrator
  3. https://www.irs.gov/individuals/request-deceased-persons-information
  4. https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax

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