Tax Return after Dieing?

Question

My brother died in October. I know that I have to file his last tax return because he had income. We do not have the medical bills $4,000 yet that he incurred so we haven't paid them but they are coming in 2007 instead of 2006. How do I report these medical bills - on his last tax return or if I pay in 2007 how do I report them if it occurs after I file his last tax return. He did not have enough to file a estate tax return nor did he have a will.

Thank you.

I am trying to avoid going to the tax man and paying extra money for this.

Answer 1

When filing the final return for your brother you may include the medical bills as if they had been paid if you attach a statement that they will be paid from his assets within one year of the date of his death. There could be an issue of those bills being eligible to be claimed because they were paid by pre-tax dollars or that your brothers circumstances are such that you would not wish to itemize his deductions. See page 135 of Pub 17 in the link below.
If he had income after the date of his death such as interest or gain from the sale of property you may need to file an additional estate return.
The best advise you could get in this forum is "don't pay attention to any of us" and go get the assistance of a tax professional that can go over all of the possibilities with you. We are only guessing based on the limited information you have provided.

http://www.irs.gov/pub/irs-pdf/p17.pdf

Answer 2

1. You can file an extension and postpone the required filing date until August 2007. This is very common.
2. Waiting for medical bills is only necessary if you think he would have itemized deductions on his return. If he doesn't itemize, the medical expenses are not deductible. If he itemizes, the only amount of medical bills he can include as itemized deduction is the amount of medical expenses that exceed 7% of his income. You should gather all his known medical bills and estimate the unknowns (such as the $4000) to see if he will exceed that 7% amount.
3. You could go ahead and file the return without the final bills and then after you get them, if their inclusion would make a difference you can file an amended return. These are very common.
4. Finally, when you finish the return, in the signature section write his name and then write "deceased".

Answer 3

Call the medical facility that are supposed to bill you and ask them if they could go ahead and send you copies of the bills so you can go ahead and file. I would then take all of the paperwork, w-2, bills, etc. to someone like H+R Block and let them do the taxes for you. That way if there is any mistakes and the IRS desides to audit you, they will send an agent to take care of it and you won't be bothered with it. They can also tell you if there might be any other deductions that you have overlooked. Good luck.

Answer 4

First off, I'm sorry for your loss. Unfortunately, if the bills were not paid in 2006 you cannot deduct them for that tax year. However....If you are the one who will be paying his bills, you can deduct them from your 2007 taxes next year on your own taxes. If there are medical bills that YOU pay, you can deduct them on your own return.

Answer 5

try the IRS web site. go to the medical faculty and talk to them in the business office and call a tax accountant and ask..............
Asking never hurt .......................................
My condolences to you and your family concerning the passing of your brother. he was blessed to have a brother who is till taking care of him. God bless you

Answer 6

Contacting the irs is your best bet..they will give you the correct info.