Several senior members of my family passed away just before and just after Jan. 1, including my father, who is survived by his wife of 59 years. What are their income tax responsibilities? How does the date of their death affect their tax return obligations?
If a person's income was subject to taxes, death doesn't relieve him of the obligation to file a tax return.
It doesn't matter whether he died in 2014 or in 2015. If his 2014 income was subject to taxes, his survivors must file a 2014 tax return for him.
In most cases, no 2015 tax return will be required for a person who died very early in 2015, says Alan E. Weiner, a Melville tax accountant. But if the decedent's estate receives enough 2015 income after his date of death — for example, investment or rental income — in 2016, his executor may have to file a 2015 income tax return for the estate. (The estate's income tax return is a "fiduciary" return, filed on Form 1041.) Any tax that's due is paid from the estate's assets.
The decedent's personal representative — i.e., his executor or administrator — signs the tax return for him. The word "deceased" should be written across the top of the return, with the decedent's name and date of death.
Your father's widow can file a joint 2014 tax return. If your spouse dies during the year, you're considered married for the whole year for filing purposes, Weiner says. If she's his executor, she signs the return on his line, writing "executor" after her signature. If there's no executor or administrator, she signs on his line, writing "filing as surviving spouse" after her signature. In either case, she also signs on her own line.
THE BOTTOM LINE Death doesn't eliminate tax liability.
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