Overview

A taxpayer’s account does not automatically close when they die. The estate’s executor—or court-appointed personal representative—becomes responsible for filing required returns, paying taxes from estate assets, and communicating with the IRS. Prompt action reduces penalties, stops collection surprises, and protects beneficiaries.

Key initial steps for executors

  1. Get certified copies of the death certificate right away. Many institutions require an official death certificate to release assets.
  2. Locate the will, appointment paperwork, and the decedent’s recent tax returns and income documents (W-2s, 1099s, bank statements).
  3. Notify the IRS and other agencies as needed. Filing IRS Form 56 (Notice Concerning Fiduciary Relationship) tells the IRS who represents the estate (IRS Form 56 instructions: https://www.irs.gov/forms-pubs/about-form-56).
  4. Determine whether you must apply for an Employer Identification Number (EIN) for the estate. An EIN is usually required if you file Form 1041 (fiduciary income tax return) or open an estate bank account (see Form 1041 guidance: https://www.irs.gov/forms-pubs/about-form-1041).

Which returns to file and when

  • Final Form 1040 (Individual). The final individual income tax return covers income the decedent received up to the date of death. File by the normal due date (typically April 15 of the following year) or request an extension to file; payments are still due by the original deadline (see Form 1040 instructions).
  • Form 1041 (Estate/Fiduciary Return). If the estate has gross income of $600 or more during any tax year (or a beneficiary who is a nonresident alien), you must file Form 1041. This reports income the estate receives after the date of death.
  • Form 706 (Estate Tax Return). File Form 706 if the gross estate exceeds the federal exclusion threshold for the date of death (thresholds change with law; confirm current limits). The Form 706 due date is 9 months after the date of death; you can request an extension using Form 4768 (estate tax extension).

Practical timeline and table

Action Typical deadline Notes
Final individual return (Form 1040) Due by the regular filing date (usually Apr 15) File for the year of death; sign as “personal representative.”
Estate income return (Form 1041) When estate gross income ≥ $600 File for income earned by the estate after death.
Estate tax return (Form 706) 9 months after death Required only if the estate exceeds exclusion limits; extension may be available.

Signing and refunds

  • Signatures: The personal representative signs the decedent’s final Form 1040; write “Deceased,” the decedent’s name and date of death at the top of the return per IRS instructions. If you’re filing Form 1041 or 706, use the estate’s EIN and sign as fiduciary.
  • Refunds and refunds due: A refund owed on the final 1040 can go to a surviving spouse (if they filed jointly) or to the estate. If you expect a refund, follow IRS guidance—attach documentation if requested (see IRS Publication 559).

Dealing with back taxes, penalties, and debts

  • Estate assets generally pay valid debts and tax liabilities before beneficiaries receive distributions. State probate law sets priority rules for creditors.
  • If the decedent owed back taxes, the executor should obtain the IRS account transcripts (via IRS’s e-Services or by contacting the IRS) and consider payment plans or Offers in Compromise where appropriate. The estate—not the executor personally—is usually liable, unless the executor co-signed debts.

Communicating with the IRS and records

  • File Form 56 to notify the IRS of your fiduciary role. Keep written records of all communications with the IRS, copies of filed returns, receipts for tax payments, and estate accounting entries.
  • If the IRS was already sending notices to the decedent, forward those and respond promptly to avoid escalations. Publication 559 (Survivors, Executors and Administrators) explains many common scenarios (IRS Pub. 559: https://www.irs.gov/publications/p559).

Common mistakes to avoid

  • Waiting to gather documents. Delays can increase penalties and complicate locating taxable income.
  • Using the decedent’s SSN for ongoing estate income. Once the estate earns income, get an EIN and use it on Form 1041 and for estate banking.
  • Distributing assets before paying valid tax claims. Always confirm tax obligations and creditor claims before distributions.

Professional tips

  • Order multiple certified death certificates; you will need them for banks, Social Security, and title companies.
  • For complex estates, hire a CPA or estate attorney experienced with executor duties. In my practice, having a tax professional prepare the final and fiduciary returns prevents common filing errors and missed deductions.
  • Consider estate liquidity options (see our guide on Estate Liquidity Solutions) if taxes or debts force sales of illiquid assets.

Where to find more help on FinHelp

Authoritative sources

Professional disclaimer

This article is educational and not legal or tax advice. Executors should consult a CPA or estate attorney for guidance tailored to the estate’s facts and state probate law.