Submit tax returns for the estate
In order to settle an estate, the executor or administrator will need to file a number of different tax returns.
Because the deceased and their estate are considered separate entities with their own tax obligations, both will need to file a separate tax return.
An estate will have to file a tax return whether or not it will have any pay any taxes.
Federal and state governments collect estate taxes.
To learn more about submitting the deceased’s tax return, see the “Submit tax return for the deceased" section of the Guide.
Estate taxes include, but are not limited to:
Estate Income Tax
- These are taxes required if the estate earned income (such as rent, sale of property, or interest on a bank account)
- If so, the executor or administrator must complete IRS Form 1041, Fiduciary Tax Return, which is specifically designed for states and trusts
- The tax return is filed under the name of the estate and its tax identification number (EIN)
- The estate’s “tax year” begins on the day of the deceased’s death, so there are 12 months to file an estate income tax return from the date of death
State Estate Tax
- These are taxes based upon the total value of the deceased’s estate, which is defined differently for each state.
- Only the following states collect taxes on the Estate: Connecticut, Hawaii, Illinois, Maine, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington, and Washington, D.C.
- Each state may tax different asset values differently, so review the laws of the state where the deceased lived for more information
- Assets titled “Payable on Death” are not part of the estate and are not subject to state estate tax. state law will dictate which assets are counted toward the total estate value for estate tax purposes.
Federal Estate Tax
- This tax is only required for estates valued at more than $11.58 million; twice that amount for married couples
- If the value of the estate is less than $11.58 million, beneficiaries will receive assets without federal estate taxes taken out
- If Federal Estate tax applies, complete and submit IRS Form 76
- Assets titled “Payable on Death” are not part of the Estate and are not subject to federal Estate tax. Federal law dictates which assets are counted toward the total Estate value for Estate tax purposes.
Because an Executor or Administrator may be held personally liable by the IRS for any potential issues or errors arousing during this process, it is recommended to work with an estate accountant when filing the estate tax return.
Helpful Tips
Common examples of Estate income
Examples of estate income include:
- Rent from the deceased’s real estate,
- Cash received from selling the Estate’s goods and assets
- Interest on the Estate’s bank account
- Cash received from selling business goods and assets (if the deceased owned a business and it was closed by the Estate)
For more information on collecting wages, income, and other amounts owed to the deceased, see the “Handle Estate Assets” section of the Guide.
Personal Considerations
Did the estate earn income?
The executor or administrator will need to file a federal estate tax return, Form 1041 with the IRS.
Because an Executor can be held personally liable by the IRS for errors on the Estate tax return, it is typically recommended to work with an Estate accountant.
The Estate’s “tax year” begins on the day of the deceased’s death, so there are 12 months to file an Estate Income tax return from the date of death
Contact an Estate accountant for assistance filing the Estate’s tax return.
The Executor or Administrator should still file an Estate tax return, Form 1041 with the IRS.
Even if the estate has no income, an estate tax return can show that the estate yielded no income (and there will likely be no taxes due).
However, it is unlikely the estate will have no income, because even interest on the estate bank account counts as estate income.
Likewise, cash received from selling assets of the estate are considered estate income.
The Estate’s “tax year” begins on the day of the deceased’s death, so there are 12 months to file an Estate Income tax return from the date of death
Because an Executor can be held personally liable by the IRS for errors on the Estate tax return, it is typically recommended to work with an Estate accountant.
Contact an Estate accountant for assistance filing the Estate’s tax return.
The executor or administrator will need to file a federal estate tax return, Form 1041 with the IRS.
Because an Executor can be held personally liable by the IRS for errors on the Estate tax return, it is typically recommended to work with an Estate accountant.
The Estate’s “tax year” begins on the day of the deceased’s death, so there are 12 months to file an Estate Income tax return from the date of death
Contact an Estate accountant for assistance filing the Estate’s tax return.
The Executor or Administrator should still file an Estate tax return, Form 1041 with the IRS.
Even if the estate has no income, an estate tax return can show that the estate yielded no income (and there will likely be no taxes due).
However, it is unlikely the estate will have no income, because even interest on the estate bank account counts as estate income.
Likewise, cash received from selling assets of the estate are considered estate income.
The Estate’s “tax year” begins on the day of the deceased’s death, so there are 12 months to file an Estate Income tax return from the date of death
Because an Executor can be held personally liable by the IRS for errors on the Estate tax return, it is typically recommended to work with an Estate accountant.
Contact an Estate accountant for assistance filing the Estate’s tax return.
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