You May Need to File TWO Separate Tax Returns
1. The Deceased's FINAL Form 1040 (Personal Income Tax)
Covers income earned from January 1 to the date of death. Filed by the executor or surviving spouse. Due April 15 of the year after death.
2. Form 1041 — Estate Income Tax Return
Covers income earned by the ESTATE after death (interest on estate accounts, rental income, business income). Only required if the estate earns more than $600 in income during administration.
Most simple estates only need the final 1040. Form 1041 is only required if the estate earns income AFTER death — which usually means estate bank account interest, rental property income, or business income that continues during probate.
The Deceased's Personal Income Tax Return
Who Files It
- The surviving spouse (if filing jointly — recommended in most cases)
- The executor or administrator (if filing separately or no surviving spouse)
What It Covers
Income earned from January 1 through the date of death:
- Wages and salary (final paycheck, accrued vacation payout)
- Social Security benefits received before death
- Pension and retirement distributions received before death
- Interest and dividends earned before death
- Rental income received before death
- Business income (for sole proprietors) through date of death
- Capital gains from asset sales before death
Filing Status Options
| Situation | Filing Status | Notes |
|---|---|---|
| Married, spouse died during the tax year | Married Filing Jointly | Most beneficial — higher standard deduction, lower brackets |
| Married, spouse died in prior tax year | Qualifying Surviving Spouse | Available for 2 years after death if you have a dependent child |
| Single, no surviving spouse | Single | Filed by executor |
| Head of household | Head of Household | If the deceased qualified before death |
"Married Filing Jointly" is almost always the best option for surviving spouses. It provides the highest standard deduction ($29,200 in 2024) and the most favorable tax brackets. The surviving spouse signs the return for both.
Step-by-Step — Filing the Final 1040
Step 1: Gather Income Documents
- ☐W-2 from employer(s) — final wages through date of death
- ☐1099-SSA — Social Security benefits received
- ☐1099-R — retirement/pension distributions
- ☐1099-INT — bank interest earned before death
- ☐1099-DIV — dividends received before death
- ☐1099-MISC / 1099-NEC — freelance or contract income
- ☐1099-B — capital gains from investment sales
- ☐K-1 — income from partnerships, S-corps, trusts
- ☐Rental income records
- ☐Business income/expense records (sole proprietors)
These documents arrive in January-February of the year after death. Watch the deceased's mail carefully. Employers and financial institutions send them to the last known address.
Step 2: Gather Deduction Documents
- ☐Medical expenses paid before death (deductible if exceeding 7.5% of AGI)
- ☐State and local taxes paid (SALT deduction — up to $10,000)
- ☐Mortgage interest paid (Form 1098)
- ☐Charitable contributions made before death (receipts)
- ☐Property taxes paid
- ☐Any other itemized deductions
Step 3: Prepare the Return
At the top of Form 1040:
- Write "DECEASED" across the top
- Write the deceased's name, SSN, and date of death
- If filing jointly: both names appear (surviving spouse + deceased)
Income section: Report ONLY income received from January 1 through the date of death. Income received AFTER death (by the estate) goes on Form 1041 — not on the 1040.
Standard deduction vs itemized: The full standard deduction is available even if the person died on January 2. There's no proration. For 2024: $14,600 (single), $29,200 (married filing jointly).
Tax software for filing a final return:
Most tax software can handle a deceased person's final 1040. When starting the return, look for the option to indicate the taxpayer is deceased.
TurboTax — Most popular. Handles final returns well. Guides you through "deceased taxpayer" questions. $0-$129 depending on complexity.
Start at TurboTax →Affiliate linkH&R Block — Comparable to TurboTax. In-person office option if you want a human to help.
Start at H&R Block →Affiliate linkStep 4: Sign the Return
| Who Signs | How |
|---|---|
| Surviving spouse (filing jointly) | Sign normally + write "Filing as surviving spouse" |
| Executor (no surviving spouse) | Sign + write "As personal representative of [deceased's name]" |
| Executor (with surviving spouse) | Both sign — spouse signs normally, executor signs for deceased |
Step 5: Attach Form 1310 (If Claiming a Refund)
If the deceased is owed a refund and you're NOT the surviving spouse filing jointly, you must file Form 1310 (Statement of Person Claiming Refund Due a Deceased Taxpayer). This tells the IRS who should receive the refund check.
Step 6: Mail or E-File
The final return can be e-filed (if using tax software or a CPA) or mailed. If mailing: send to the IRS address for the deceased's state of residence.
The Deadline
Due: April 15 of the year following death.
| Date of Death | Final 1040 Due Date |
|---|---|
| Any date in 2025 | April 15, 2026 |
| Any date in 2026 | April 15, 2027 |
Can you get an extension? Yes — file Form 4868 for an automatic 6-month extension (to October 15). The extension gives you more TIME to file — but does NOT extend the time to PAY. If taxes are owed, estimated payment is still due April 15.
If the person died in November or December, you have only 4-5 months to gather documents, prepare the return, and file. If you need more time — file the extension on April 15 and finish by October 15.
Form 1041 — Estate Income Tax (Only If the Estate Earns Income After Death)
Estate income is taxed AGGRESSIVELY.
The estate hits the 37% tax bracket at just $14,450 in income — vs $609,350 for individuals. If the estate is earning interest or rental income, distribute it to beneficiaries quickly. Income distributed to heirs is taxed at their lower rate.
You need Form 1041 ONLY if the estate earns more than $600 in gross income during administration.
Common Sources of Estate Income
- Interest on estate bank accounts
- Dividends on estate investments
- Rental income from estate property
- Business income (if the deceased's business continues operating)
- Gains from selling estate assets (stocks, real estate)
You Do NOT Need Form 1041 If:
- The estate is distributed quickly (no time to earn income)
- All accounts had beneficiary designations (money went directly to heirs, not the estate)
- The estate bank account earns less than $600 in interest
Who files: The executor, using the estate's EIN (Employer Identification Number — get one free at IRS.gov/ein).
Due date: April 15 of the year after the estate's tax year ends. The estate's tax year begins on the date of death. The executor chooses a fiscal year ending on the last day of any month within 12 months of death.
This is why executors distribute estate income to beneficiaries quickly — income distributed to beneficiaries is taxed at THEIR individual rate (usually lower). Income retained in the estate is taxed at the estate's compressed rate (usually higher).
Deductions That Reduce the Tax Bill
On the Final Form 1040:
- Medical expenses paid in the year of death (exceeding 7.5% of AGI) — OR deducted on the estate tax return (Form 706) — but NOT both
- State and local taxes paid (up to $10,000 SALT cap)
- Mortgage interest paid through date of death
- Charitable donations made before death
- Property taxes paid
- Standard deduction (full amount — no proration for partial year)
On Form 1041 (Estate Return):
- Attorney fees for estate administration
- Executor compensation
- Accounting/CPA fees
- Court costs and filing fees
- Appraisal fees
- Property management expenses (maintenance, insurance, taxes on estate property)
- Distributions to beneficiaries (reduces estate's taxable income)
NOT Deductible on Either Return:
- Funeral expenses — deductible only on the estate tax return (Form 706), which only applies to estates over $13.61 million
- Personal living expenses of the deceased
- Debts paid by the estate — these reduce the estate's assets, not its income
DIY vs Professional — The Honest Assessment
File It Yourself If ALL Are True:
- ✅ The deceased was a W-2 employee (not self-employed)
- ✅ Income sources are simple (wages + SS + maybe interest)
- ✅ You're filing jointly with the surviving spouse
- ✅ You're taking the standard deduction
- ✅ No Form 1041 is needed (estate earns < $600)
- ✅ You're comfortable using tax software
Hire a CPA If ANY Are True:
- ⚠️ The deceased was self-employed or owned a business
- ⚠️ Multiple income sources (rental, investments, partnerships)
- ⚠️ Form 1041 is required
- ⚠️ The estate is complex or large
- ⚠️ Tax debts or unfiled returns from prior years
- ⚠️ Not comfortable preparing someone else's return
- ⚠️ Income in multiple states
Cost of a CPA: $300-$800 for the final 1040. $500-$1,500 for Form 1041. Paid from the estate — not from your personal funds.
A CPA costs the estate $300-$800. A mistake on the final return could cost the estate $5,000+ in penalties and interest. If there's any complexity — hire the CPA. It's the cheapest insurance in estate administration.
Not sure where to find a CPA? Ask the probate attorney for a referral, or search the AICPA's Find a CPA directory.
5 Errors That Trigger IRS Problems
1. Filing too late without an extension.
Penalty: 5% of unpaid taxes per month, up to 25%. If no tax is owed, there's no late-filing penalty — but file anyway to start the statute of limitations.
2. Reporting income received AFTER death on the final 1040.
Income received after the date of death belongs on the estate's Form 1041 — not on the deceased's personal return. Mixing them up creates double-counting problems.
3. Not claiming the full standard deduction.
The deceased gets the FULL standard deduction regardless of when they died. Even if they died January 5, the deduction is NOT prorated. Many filers miss this.
4. Forgetting to file Form 1310 for the refund.
If the deceased is owed a refund and you're not the surviving spouse, you MUST file Form 1310. Without it, the IRS holds the refund indefinitely.
5. Not getting an EIN for the estate.
If the estate earns income, it needs its own EIN — you can't use the deceased's SSN for estate income. Get one free at IRS.gov/ein in 5 minutes.
The Complete Checklist — Print and Use
- ☐Gather all income documents (W-2, 1099s, K-1s)
- ☐Gather all deduction documents (medical, mortgage, charitable, taxes)
- ☐Determine filing status (joint, single, surviving spouse)
- ☐Decide: standard deduction or itemize
- ☐Prepare Form 1040 — mark "DECEASED" at top
- ☐File Form 1310 if claiming a refund (non-spouse)
- ☐Determine if Form 1041 is needed (estate income > $600?)
- ☐Get an EIN for the estate if needed (IRS.gov/ein)
- ☐File or extend by April 15
- ☐Pay any taxes owed by April 15 (even if extending to file)
- ☐Keep copies of everything for 7 years