Estate administrators have a lot of do when they are trying to close an estate. It is imperative that they do so in the appropriate manner so that they don’t harm the estate, delay the closing or face troubles themselves for failing to meet their obligations for this duty. There are several things that they need to do.
One duty of the estate administrator is filing the final income tax return. This is due on the standard tax due date for the tax year in which the person passed away. If the person was married when they passed away, this 1040 is still filed as a joint return for this final year. You have to know whether medical bills need to be considered on this, and you should find out if the person has to pay a federal estate tax. In 2019, only estates worth more $11.4 million are subject to the federal estate tax, which is filed using Form 706.
On top of the standard 1040 filing, there are other tax filings that might have to happen. These include the filing of a 1041, which is used if the estate had a gross income of $600 or more for the year. There are some exceptions to this, such as when the assets that produce an income are transferred directly to the spouse or other heirs in specific manners.
Other obligations might also be present, so be sure you understand how to handle these. This can include state and local tax filings, as well as paying for specific bills and expenses. Taking care of these in a timely manner and in accordance with the law is critical to ensure you can close the estate properly.