Do you have to file taxes when you die?

Question

Does a person who dies in November, 2005, have to file taxes for that year?

More info:
The person was disabled, not working, had no income aside from social security, and hadn't filed taxes since they stopped working. Are they, or the Executor of the Estate, supposed to file taxes?

As the Executrix, I followed all the requirements that the court gave me but I never saw anything about filing taxes.

FYI: There was more debt than assets. The estate was deemed insolvent by the courts.

Answer 1

A final 1040 (and state return) might have been needed to be filed for the year of the person's death, but if all they had for income was social security income, then more than likely a return would not have been necessary. You should just make sure though that no federal withholding tax was taken out of the social security. If there was there you would want to file a return to get that back (and maybe check 2004 to see if there was any federal withholding from the social security as well). A federal estate return would be needed to be filed if the net federal estate exceeded 2,000,000.

Answer 2

Obviously, a dead person cannot sign a return. Normally, the Executor is supposed to file a return for deceased for the year of death (and for any earlier years for which no return was filed before death) and to file a return for the estate. However, if the person was married at the time of death and the surviving spouse does not remarry, then the surviving spouse can file as married filing jointly and a separate return for the deceased is not needed. (The return for the estate is still needed.)

However, in this case, it sounds like there was no taxable income, so there probably does not need to be a return filed. If any taxes were withheld, file a return to get those taxes refunded.

Answer 3

A return is required if the taxpayer would otherwise be required to file. Given what you say about the taxpayer's situation, a return would not be required. If the net value of the estate was less than $2 million, an estate tax return would not be required either.

Answer 4

If the taxpayer would have been required to file if he had lived through the end of the year, then a return marked "final return" should be filed for him for that year. If his only income that year was from social security, no return is required.

Answer 5

Technically no final return is due if no income. But practically it is a good idea to file one anyway to delete them from IRS records so they know the taxpayer is gone for good.

Answer 6

it does not depend on the person, rather in the flow of income from the sources................ after the death that flow is linked or transfered to family member, which in future have to maintain taxation policy. so according to laws to operate the flow of income in the future one has to clear all the liabilities headed by the dead person.