They say that the only things certain in life are death and taxes. Let’s look at these two events and how they affect one another.
If you’ve ever been involved in settling an estate, then you know that it’s never straight forward, and there are usually complications of some sort. Here is some information that you might find useful if you find yourself in this situation.
The First Things an Executor Should Do After the Death of a Loved One
The first thing an executor should do is to file with the IRS for an employer identification number (EIN). The EIN is necessary because a final return will be filed on behalf of the deceased’s estate, not for the individual.
Any entity who will be paying interest or dividends to the estate should be provided with the EIN via a W-9 form, also available from the IRS. This allows the entity to issue a Form 1099 to the estate using that EIN.
After the executor has received the EIN, they should file a Form 56 with the IRS to let the IRS know that they are a “fiduciary” responsible for the filing the taxes for the deceased.
Federal and State Estate Taxes
The requirement to file Estate Taxes depends on the location and size of the deceased’s estate. Federal estate taxes are not owed unless the estate is worth more than $11.4 million. If the deceased owned real estate in the following states, State estate taxes are due and must be paid:
District of Columbia
Refer to each state’s laws to determine how and when estate taxes need to be filed.
There are many other rules and statutes to which you must adhere after a loved one’s death. Depending on your experience in settling estates and representing loved ones as executors, this may be overwhelming. If you need help to determine status and file taxes on behalf of a loved one’s estate, you could benefit from calling JStevens Accounting, and getting help with sorting out all the tax obligations you face.
Contact us today… let’s sit down and let us help you through this difficult, complicated time.