Taxes are usually the last thing you want to think about. They are often complex and stressful.
Filing your own taxes is especially the last thing on your mind when you and your family are facing the process of probate. But what about your loved one’s taxes – are they still necessary after death? And do you have to file them, if you are the executor or personal representative in a probate matter?
Yes, you must file taxes in probate
One of the most critical steps in the probate process is taking care of a loved one’s debts and remaining financial responsibilities. The executor or personal representative must make sure outstanding bills are paid, such as any medical bills, credit card debts and utilities.
However, this step also includes filing taxes on behalf of your loved one.
It is critical to note that – like other debts in your loved one’s name – you and your family members will likely not be directly responsible for paying the taxes. Anything owed will come from the estate. This can differ if surviving spouses file jointly, but any payments are usually from the estate.
So, what do you have to do?
In general, there are a few steps you must take to file the final tax returns. For example, you must:
- Obtain the decedent’s federal ID number
- Notify the IRS that you are the executor or personal representative and acting on your loved one’s behalf
- Gather the proper paperwork, including obtaining a certificated copy of a death certificate
- File any and all necessary tax returns (including outstanding past due returns!)
You should also check whether there are any overdue tax returns from previous years. You must pay these as well.
Which returns are necessary to file?
The tax returns you will have to file will depend on your loved one’s individual circumstances. But in California, the returns you may need to file include:
- State income tax returns
- Fiduciary income tax returns
- Real estate or property taxes
- Business or employment taxes
- The federal estate tax, if necessary
The State of California’s Franchise Tax Board provides a helpful guide for families managing taxes during the probate process. It might also be beneficial to consult an experienced probate attorney to make sure everything in the final tax return is in order.