Upon a family member’s death, what taxes are due?

There may be both federal and / or state estate taxes due, on estates of a certain size. This amount may change as determined by federal and state legislative bodies. This tax is calculated on the net taxable estate value. Check with our office for the latest information, or look at the IRS Publication 559, “Information for Survivors, Executors and Administrators”.

For federal estate taxes, if you owe them, you’ll need to file a Form 706 within nine months of the date of death, although you can get a six-month extension. Again, we’ll be happy to help you handle this. Just give our office a call.

State estate taxes, of course, vary by state. While we, as CPAs can handle any tax issues in other states, you may need to engage an attorney in the other state in which real estate is owned by the decedent.

Also, the deceased’s state and federal income taxes are still due for the year of their death. Unless an extension is requested, the taxes are due on the regular filing date of the coming year. The surviving spouse may still file a joint federal income tax return for the year during which their spouse died. If the spouse has a dependent child, he/she may file for an additional two years.

And finally, the estate may also be taxed on any income earned by the estate during the probate period. The Federal Tax is reported on Form 1041 — Fiduciary Income Tax Return. There may also be state income tax due. This can vary by state. Again, we will be happy to help you with any estate issues you may have. Just give our office a call for an appointment.