The final estate tax return is used to calculate the estate taxes for a deceased individual. There are two ways to figure the taxes: by using the calendar year or by using the fiscal year. If the deceased individual used a calendar-based year, the return will be due four months after the date of death. You can use the fiscal-year method if the taxable period begins in October and ends in August of the next year.
A Final Estate Tax Return is usually filed by an executor of the decedent’s estate, who is usually the spouse of the deceased. It’s important not to confuse the Final Return with the estate tax return, which would be used to report income the deceased had after their death. A person’s final estate tax return would only reflect income that the decedent received after his or her death. So, it is best to ensure the deceased’s heirs have all the necessary paperwork to file the final return.
The tax return must be filed within nine months after the death date. The executor will have to apply for a separate IRD number for the estate, which is a separate entity. The Final Estate Tax Return must be filed before the death of the deceased, or within six months after the date of the last distribution. The tax is not due on the capital of the estate, but may be due on interest on funds in the bank, rental income, share dividends, etc.
The final estate tax return is required by the personal representative or executor of the estate. The tax is paid out of the estate and should be done by a qualified CPA firm. Once the executor has completed the final return, he or she must file the official report with the court called the “Final Plan and Accounting.” The judge will have to approve the final plan and accounting before determining the estate taxes. The final return is often filed by the executor of the estate or personal representative.
The IRS Form 1041 is the official form for the final estate tax return. The form is a fiduciary’s duty to act honestly and in the best interest of the estate. The form contains boxes for the decedent’s individual income tax and the estate income tax return. The last one is due on April 15th, and it can be filed jointly with the surviving spouse. The remaining two forms must be filed within six months of the decedent’s death.
In the case of a deceased, the executor must file the final estate tax return with the appropriate authorities. It must be filed within six months of the date of death. If the deceased has been living for over 12 months, he or she should have filed the estate tax returns and paid all debts before preparing the Final Estate Tax Return. However, the executor must file the return by the date of death.
