How to File Taxes for a Deceased Person: Returns, Deadlines, and Forms

Three Tax Returns, Not One

When someone dies, the executor may need to file up to three different tax returns, each covering a different slice of the financial picture:

1. The final individual income tax return — covers income earned from January 1 through the date of death
2. The estate income tax return — covers income the estate earns after death (interest, rent, dividends on estate assets during administration)
3. The federal estate tax return (Form 706) — generally required above the exemption threshold; a smaller estate may file to elect portability for a surviving spouse

Most estates only need the first two. The third is less common because the federal estate-tax exclusion is high.

The Final Individual Return (Form 1040)

The executor files the deceased person's last Form 1040, covering income from January 1 through the date of death. You'll report wages, Social Security benefits, pension distributions, interest, dividends, and any other income received up to that date.

Deadline: The normal April 15 filing deadline for the year of death. If someone dies on March 10, 2026, the final return is due April 15, 2027. Extensions are available (Form 4868).

How to file: Write "DECEASED" across the top of the return, followed by the decedent's name and date of death. If the deceased was married, the surviving spouse can file a joint return for the year of death, which often reduces the overall tax bill.

Medical expenses: Medical costs paid before death may be deductible on the final return, subject to the usual limits. Medical expenses for the decedent paid by the estate within the one-year period beginning the day after death can be elected as if paid by the decedent, and deducted on the decedent's income tax return instead of Form 706, subject to IRS requirements.

Who signs: The executor signs as "personal representative." If no executor has been appointed yet, the surviving spouse can sign a joint return.

The Estate Income Tax Return (Form 1041)

The executor generally must file Form 1041 if the estate has gross income of $600 or more during the administration period, or if it has a nonresident alien beneficiary. Common income sources include interest on bank accounts, rent from the deceased's property, and dividends on undistributed estate assets.

Deadline: The estate can choose either a calendar year or a fiscal year ending on the last day of a month, with its first tax year no longer than 12 months. Form 1041 is generally due by the 15th day of the fourth month after the tax year ends; for a calendar-year estate, that is April 15.

Key deductions: Certain administrative expenses and charitable amounts may be deductible under IRS rules, and the same expense cannot be deducted on both Form 1041 and Form 706. Distributions that carry out distributable net income generally generate a distribution deduction for the estate, with beneficiaries reporting their allocated income on Schedule K-1.

Filing requirement: The estate needs its own EIN (Employer Identification Number), which you obtain free from the IRS online.

The Federal Estate Tax Return (Form 706)

For a US citizen or resident, Form 706 is generally required when the gross estate plus adjusted taxable gifts and any specific gift tax exemption exceeds the applicable filing threshold: $13.99 million in 2025 and $15 million in 2026. A return may also be filed below that threshold to elect portability, allowing a surviving spouse to use the deceased spouse's unused exclusion. Different filing rules apply to nonresident noncitizens with US-situated assets.

Deadline: Nine months after the date of death. A six-month extension is available by filing Form 4768, but any tax due must still be estimated and paid by the nine-month deadline.

What counts: Form 706 reports the deceased's gross estate, which can include non-probate assets as well as probate property. Life insurance proceeds payable to the estate, retirement accounts the deceased owned, the deceased's includible share of jointly held property, and revocable trust assets may be included under the applicable ownership rules.

Tax rate: The statutory rate table ranges from 18% to 40%; the applicable exclusion and any available credit determine whether federal estate tax is due.

Tax Rules Outside the US

United Kingdom

The UK charges Inheritance Tax (IHT) at 40% on estates exceeding the £325,000 nil-rate band. A residence nil-rate band of up to £175,000 applies if the home is left to direct descendants. Transfers between spouses are fully exempt, and unused nil-rate band can transfer to the surviving spouse.

Before applying for probate, report full estate details to HMRC on form IHT400 if required. For an excepted estate, provide the required estate values in the probate application. In some cases, IHT must be started before probate is granted — creating a cash-flow challenge since the estate's bank accounts may still be frozen.

Canada

Canada has no inheritance or estate tax, but it has something effectively similar: the "deemed disposition" rule. Capital property is generally treated as if it were sold at fair market value immediately before death, and any resulting gain is reported on the deceased's final tax return. A transfer to a surviving spouse or qualifying spousal trust can defer the tax.

For someone who bought a stock portfolio for $100,000 that's worth $500,000 at death, the deemed disposition generally creates a $400,000 capital gain even though nothing was actually sold. The taxable portion is calculated under the applicable inclusion rules, and a qualifying rollover or principal residence exemption may apply.

Australia

Australia has no inheritance tax and generally no CGT event on death. CGT may apply when beneficiaries later sell inherited assets. For an asset the deceased acquired before 20 September 1985, the beneficiary's cost base is generally its market value on the day of death; for later-acquired assets, the deceased's cost base generally carries over, subject to exceptions.

Exception: immediate CGT liability applies on transfers to foreign residents or tax-exempt entities.

Common Tax Mistakes Executors Make

• Missing the Form 706 deadline and facing penalties plus interest
• Distributing all assets before taxes are paid and being personally liable for the shortfall
• Forgetting to file state estate or inheritance tax returns — 12 states and DC impose their own estate taxes, often with lower exemption thresholds than the federal level
• Not requesting a "closing letter" from the IRS after Form 706 is processed, which confirms no further tax is due

Getting Help

Estate tax returns are complex enough that most executors hire a CPA or tax attorney. The How to Read and Execute a Will toolkit includes a tax compliance checklist that tracks every filing deadline and required form, so nothing slips through the cracks while you coordinate with your tax professional.