In order to settle an Estate, the Executor or Administrator will need to file a number of different tax returns.

Because the deceased and their Estate are separate entities, both will need to file because each has their own tax obligation.

Estate Taxes owed include, but are not limited to the following:

Estate Income Tax

• These are taxes required if the Estate earned income during Probate (selling property, goods, interest on a bank account, etc)


• If so, the Executor or Administrator completes IRS Form 1041, also known as the Fiduciary Tax Return, specifically tailored of Estates and Trusts, as well as any other applicable state tax return documents


• The tax return is filed under the name of the Estate and its employer identification number or EIN (the same that was used to open the Estate Account


• Note: the Estate's "tax year" begins on the day of death; that is, there are a 12 months to file the Estate Income Tax return from the date of death rather than the yearly April 15th deadline

State Estate Tax

• Taxes possibly required against the total value of the deceased's Estate, including property, bank accounts, and Life Insurance policy proceeds


• Only the following states collect taxes on the Estate: CT, DE, DC, HI, IL, MA, MD, MN, NJ, NY, NC, OH, OR, RH, TN, VT, WA


• And each state may tax different Asset values differently, so review local law at the links below for more information


• Note: Assets held jointly, or set as Payable-On-Death are not part of the Estate and are not subject to State Estate Tax (example: property inherited by a spouse)

Federal Estate Tax

• This tax is only required for Estates valued at more than $11.58 million; twice that amount for married couples


• That is, if the value of the Estate is less than $11.58 million, Beneficiaries will receive assets without taxes taken out


• If applicable, use IRS Form 706

Note: because an Executor or Administrator may be held personally liable by the IRS for any potential issues during this process, hiring an Estate Accountant is typically recommended.

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