You have a tough job as an estate executor. Not only are you grieving the loss of a family member or close friend, but you’re also responsible for completing all of the financial paperwork when your loved one dies.
You’re responsible for making sure that each company is paid what they’re owed, including the bills for funeral expenses and taxes. You’ll also distribute the estate balance among your loved one’s beneficiaries.
Jump ahead to these sections:
- Steps of Notifying the IRS About Your Loved One’s Death
- Why You Should Notify the IRS About Your Loved One’s Death
- Other Tax Responsibilities for Estate Executors
Completing this detailed work is difficult even in the best of times, but having to focus while you’re grieving? It’s a Herculean task.
One thing that you might not think to do when someone dies is to notify the Internal Revenue Service. We’ll walk you through the process and analyze the reasons why you need to complete this task.
One thing to keep in mind is that if you are working with a full-service funeral home, the director may contact the Social Security Administration (SSA) regarding your loved one’s death as part of his or her normal process.
If this is the case, it’ll set off a chain of events. The SSA may contact the three credit bureaus as well as the IRS. By the time you think of contacting the IRS, they may have already been contacted by the other agencies.
Steps of Notifying the IRS About Your Loved One’s Death
These steps are not only legally required, but they also protect the deceased’s estate. These are especially essential to complete if you are not working with a full-service funeral home. Overlooking these steps may cause your loved one’s estate to be tied up in financial investigations for months or years.
Step 1: Send the IRS a copy of the death certificate
As soon as possible, send the IRS a copy of the death certificate. Mail the copy of the death certificate to the campus where the deceased would have normally filed his or her taxes. Search where the deceased would have filed paper returns.
Once the document is received, officials at the IRS office will flag the account that the person is deceased.
Step 2: Carefully write your loved one’s obituary
The IRS’ website cautions executors not to reveal too much information about the deceased in the obituary.
A criminal may be able to steal your loved one’s identity by using the deceased’s full name, birth date, address, and mother’s maiden name. Although an obituary should be used to honor the life of a person who died, it’s sometimes used for evil intent.
Step 3: Notify a credit agency of your loved one’s death
The IRS recommends that executors contact all three national credit reporting agencies to report a death. The credit agencies’ websites say that it is only necessary to notify one agency, and that agency’s employees will share the information with the other two.
According to Experian’s website, the company usually receives the notification of a person’s death from the individual’s creditors. If the creditors are not informed, the Social Security Administration often reports deaths to Experian. At this point, Experian flags the account.
Experian’s website says you can mail Experian a copy of the death certificate. You must also provide legal notification that you are the executor of the estate so the credit reporting agency can flag it as belonging to a person who has died.
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Step 4: Request the deceased’s credit report
You’re probably used to being able to find any critical information online but you may have a difficult time requesting a deceased person’s credit report this way. According to Equifax’s website, the spouse or executor of the estate may request a credit report for the deceased using snail mail.
Send a letter detailing the legal name of the deceased, his or her Social Security number, and the date of birth and death. Include the deceased’s last known address and a copy of the death certificate or a letters testamentary. A letters testamentary is issued by a court and authorizes the executor of a will to take control of the deceased’s estate. Include your full name and address and mail to:
P.O. Box 105139
Atlanta, GA 30348-5139
P.O. Box 2002
Allen, TX 75013
P.O. Box 2000
Chester, PA 19016
Step 5: Review the credit reports
Once you receive copies of the report through the mail, review them to see if there is any questionable activity. Look for accounts that seemed to have been opened erroneously.
Besides looking for incorrect information on the report or signs of fraud, you can also use the report to help you close the estate. The credit reports will have all the names and contact information for the companies that your loved one may have done business with throughout the years. You can contact each of these companies to close each account.
As a side note, it is also important to secure your family member’s personal residence as well. Thieves may be aware that your loved one died and may take advantage of the timing to burgle the house.
Step 6: Include a copy of the death certificate in the tax returns.
Executors are required to file tax returns for the deceased. Include a copy of the death certificate with the last tax form. The copy does not need to be certified.
Why You Should Notify the IRS About Your Loved One’s Death
Identity theft is a real problem in the United States and one of the primary victims of this form of theft is deceased individuals. Protect the assets of your loved one’s estate by not allowing thieves to open new accounts under your loved one’s Social Security number.
Look for signs of identity theft soon after your loved one dies. Pay attention to whether your loved one’s phone number receives calls from creditors or collection agencies.
Also, look for strange statements that might arrive in the mail. If you have access to your loved one’s email, monitor the email account for strange notifications. Notify authorities immediately if you suspect fraud.
Other Tax Responsibilities for Estate Executors
Executors are responsible for filing a tax return for the deceased as well as the estate, according to the IRS website.
The deceased personal income tax form (Form 1040) should be filled out for the year of death. It must also be filled out for any previous year that the form was not filed. This might not be necessary if the deceased did not make the minimum amount required to file a tax return.
Use Form 1041 to file an income tax return for the estate. You will need the tax identification number (or employer identification number) to file this return. You must complete this step if the estate generates more than $600 in assets.
Keep in mind that after the time of death, any interest that is accrued or dividends or income that is received is now taxable income. This means that even if the estate previously did not have to file a return, the executor may need to do this after the person died.
If you’re struggling to find the necessary tax documents to assist you to file a return, contact the IRS. Representatives may be able to provide W-2 forms or 1099s for the deceased.
Taking Care of Your Paperwork
You may be overwhelmed by the critical tasks that you need to complete as the executor of an estate, so remember that your loved one trusted you above all others.
He or she felt you were capable and willing to complete these final vital tasks on his or her behalf. Your loved one knew that you would know what to do when somebody dies. Be mindful of that honor.
Second, be thankful if the deceased left his affairs in order. Not everyone completes end-of-life planning. The fact that your loved one had an estate with a designated executor is a good thing.
Third, although you may not feel as if you have the time or energy required to complete all the duties of finalizing an estate, you are doing so for the good of the rest of the beneficiaries. They should be thankful that you will complete the task.
If you're looking for more on death and taxes, read our guide on how long to keep tax records after a death.
Post-planning tip: If you are the executor for a deceased loved one, handling their unfinished business can be overwhelming without a way to organize your process. We have a post-loss checklist that will help you ensure that your loved one's family, estate, and other affairs are taken care of.
- “Deceased Taxpayers: Protecting the Deceased’s Identity from ID Theft.” November 15, 2019. www.irs.gov/businesses/small-businesses-self-employed/deceased-taxpayers-protecting-the-deceaseds-identity-from-id-theft.
- “Deceased Taxpayers: Understanding the General Duties of an Estate Administrator.” July 16, 2019. www.irs.gov/businesses/small-businesses-self-employed/deceased-taxpayers-understanding-the-general-duties-as-an-estate-administrator.
- “How Do I Obtain a Credit Report for a Deceased Person?” help.equifax.com/s/article/How-do-I-obtain-a-credit-report-for-a-deceased-person.