Taxes do not stop when someone dies. The IRS still expects a final tax return for the year of death. This is one of those tasks that feels overwhelming during an already difficult time, but it is manageable if you know the rules.
This guide will walk you through the process step by step. We will explain who is responsible for filing, which form to use, how to claim medical deductions that can produce a large refund, and how to get that refund into the right hands.
Who Is Responsible for Filing the Final Return?
The responsibility falls on the person who is handling the deceased person's affairs. That is usually one of three people.
- The surviving spouse. If the couple filed jointly, the surviving spouse can file one final joint return for the year of death. This is often the best option because joint filing usually results in a lower tax bill.
- The executor or personal representative. If there is no surviving spouse, or if the spouse does not want to file jointly, the executor named in the Will is responsible. If there is no Will, the court appoints an administrator, and that person handles the return.
- The beneficiary or heir. If no executor or administrator was ever appointed, a family member who inherits the deceased person's property can file the return. The IRS just needs someone to take responsibility.
Which Form Do You Use?
The final tax return uses the same Form 1040 that the person would have filed while alive. You are simply filing it on their behalf for the year they passed away.
Write "Deceased" across the top of the form along with the date of death. This tells the IRS that this is a final return.
There is one exception. If the deceased person received income from a business, rental property, or investments after they died, that income belongs to the estate, not to the individual. The estate may need to file a separate return using Form 1041. This is called an Estate Income Tax Return. Most simple estates do not need this, but if the deceased had significant investment income after death, talk to a tax professional.
Who Signs the Return?
- If you are the surviving spouse filing a joint return, you sign as you normally would. You write "Filing as surviving spouse" in the signature area.
- If you are the executor or administrator, you sign as the personal representative. You will need to attach a copy of your court appointment document (called Letters Testamentary or Letters of Administration) to prove you have the authority.
- If you are a beneficiary filing on behalf of the estate without court appointment, you sign as a "personal representative" and attach a statement explaining why you are filing.
The Medical Deduction That Produces Big Refunds
Here is something most people do not know. Medical expenses that were paid within one year of the death can be deducted on the final tax return. This can produce a significant refund.
The rule works like this. If the deceased person had unpaid medical bills at the time of death, and those bills were paid by the estate or by a family member within one year, those expenses can be claimed as a deduction. This includes hospital bills, nursing home costs, doctor visits, and prescription medications.
You claim these deductions on Schedule A of the Form 1040. The total must exceed 7.5 percent of the deceased person's adjusted gross income to be deductible. But if the medical bills were large, this can wipe out the tax liability entirely and produce a refund.
How to Claim the Refund Using Form 1310
If the final tax return shows a refund, the IRS will not automatically send it to the executor or the family. They need to know who is entitled to receive it.
You file Form 1310, called the Statement of Person Claiming Refund Due a Deceased Taxpayer. This form tells the IRS who should receive the refund check.
You attach Form 1310 to the final Form 1040. The form asks for your name, your relationship to the deceased, and whether you are the court appointed representative or a surviving spouse. It is short and simple.
If you are the surviving spouse filing a joint return, you do not need Form 1310. The refund will simply be issued in both names as usual.
What About the Deadline?
The final tax return is due by the normal tax deadline of April 15 of the following year. If the person died in 2024, the final return is due April 15, 2025.
If you need more time, you can file for an extension using Form 4868. This gives you until October 15. But remember, an extension to file is not an extension to pay. If taxes are owed, interest and penalties start accruing on the original deadline.
Do You Need a Tax Professional?
If the deceased person had a simple financial life (a job, a bank account, and a retirement account), you can probably file the final return yourself using tax software. Most major tax software programs handle deceased taxpayer returns.
If the estate is complicated, involving rental properties, business income, significant investments, or a large estate, hire a CPA or enrolled agent who specializes in estate taxes. The cost is usually a few hundred dollars and can save you thousands in mistakes.
Conclusion
The final tax return is one of those tasks that feels harder than it actually is. Gather the documents. Fill out the Form 1040. Claim the medical deductions if they apply. Attach Form 1310 to get the refund. And if you get stuck, hire a professional.
Helpful Resources on Our Site
- Death Certificates: The Essential Guide The IRS will need a copy for the final return.
- Probate 101: What It Is, How to Avoid It How the estate and the final return fit together.
Disclaimer: This content is provided for informational purposes only and does not constitute tax or legal advice. Tax laws change frequently. Consult a licensed CPA or tax attorney for advice on your specific situation.