How to file taxes for a deceased person in 2025

Losing a loved one brings grief and a list of urgent financial and legal obligations, including the requirement to file their final federal income tax return. Understanding how to file taxes for a deceased person in 2025 helps executors, surviving spouses, and administrators stay compliant, avoid penalties, and protect the estate's assets.

The IRS expects a final return from any individual who had taxable income in the year of their death, and additional estate-level returns may be required depending on the estate's size and post-death income. Individuals who understand these obligations can act quickly, organize their income documents early, and claim every available deduction on the final return.

IRS Publication 559, Survivors, Executors, and Administrators, is the primary IRS reference for managing these filings. This guide covers who is responsible, which forms are required, how to complete the final Form 1040, and how to reduce the estate's decedent tax burden through planning strategies.

Who files a deceased person's tax return

The personal representative of the estate, typically the executor or administrator named in the will or appointed by the probate court, holds the legal obligation to file the final return. When no formal representative exists, the duty falls to the person who receives the decedent's property.

A surviving spouse may also file a joint return for the year of death if they have not remarried before December 31 of that year. Filing jointly generally produces a lower tax liability and allows the surviving spouse to claim full deductions and credits that may be reduced on a separate return.

Responsibilities of the personal representative include:

• Gathering all income documents, such as W-2s, 1099s, and Schedule K-1s received up to the date of death
• Applying for an Employer Identification Number (EIN) for the estate if a separate estate income return is required
• Signing the final Form 1040 on behalf of the deceased and filing Form 56 to establish fiduciary authority with the IRS
• Notifying financial institutions, employers, and government agencies of the death

If the deceased owned a primary residence, the stepped-up basis rules apply as of the date of death, eliminating built-in capital gains on inherited property. A surviving spouse may claim the Sell your home capital gains exclusion of up to $500,000 if the property is sold within two years of the date of death and the decedent met the ownership and use requirements. For other heirs, the stepped-up basis typically eliminates any taxable gain on a near-term sale.

Traditional 401k balances and other pre-tax retirement accounts must be reported and distributed carefully, as amounts received by beneficiaries are generally taxable income in the year distributions are made.

What tax forms are needed after someone dies

The returns required after a person's death depend on the size of the estate, the decedent's income, and whether the estate continues to receive income during administration. Most estates require at least one return, while more complex situations call for several filings.

Form 1040 is the final individual income tax return. It covers all income earned from January 1 of the year of death through the exact date of death. Write "DECEASED," the decedent's legal name, and the date of death across the top of the form.

Form 1041 is the U.S. Income Tax Return for Estates and Trusts. It is required whenever the estate generates $600 or more in gross income after the date of death, covering interest on estate bank accounts, dividends, rental income, and business income during the administration period.

Form 706 is the federal estate tax return. It applies to estates exceeding the applicable exemption. Under the One Big Beautiful Bill Act, the 2025 estate tax exemption is $15 million per individual, meaning only the largest estates are subject to this filing obligation.

Form 56 establishes the fiduciary relationship and gives the personal representative authority to interact with the IRS on behalf of the estate.

Form 1310 is required to claim a tax refund on behalf of a deceased person when the filer is not a surviving spouse or a court-appointed executor holding valid documentation.

IRS Publication 590-B, Distributions from IRAs, provides detailed rules for beneficiaries who inherit IRA accounts, including required minimum distribution schedules, the ten-year rule for non-spouse beneficiaries, and how the five-year holding period affects Roth IRA distributions.

Families establishing accounts for younger beneficiaries should also review the Child traditional IRA rules, which allow minors with earned income to build their own tax-advantaged retirement savings separately from inherited retirement assets.

How to complete a deceased person's Form 1040

The final Form 1040 functions much like any other individual return, but includes key differences executors and surviving spouses must address. The return covers income received from January 1 through the date of death. All wages, self-employment income, interest, dividends, rental income, and capital gains earned or constructively received before death must be reported.

The 2025 standard deduction amounts are $15,750 for single filers and $31,500 for married filing jointly, both of which are permanently established under the One Big Beautiful Bill Act. A deceased single filer receives the full standard deduction for the year of death, regardless of when during the year the death occurred, as the deduction is not prorated based on months alive.

Key steps for completing the final Form 1040:

1. Write "DECEASED," the decedent's full legal name, and the date of death across the top of the return
2. Select the correct filing status: single, married filing jointly, or married filing separately
3. Report all income earned from January 1 through the date of death across all income categories
4. Claim all eligible deductions, including medical expenses, charitable contributions, and state taxes paid
5. File Form 1310 alongside the return if a refund is owed to the estate

The Health savings account balance held by the deceased requires careful handling. When the named beneficiary is a surviving spouse, the HSA passes to them tax-free and retains its full tax-advantaged status. For any other beneficiary, the fair market value of the account becomes taxable income in the year of the original account owner's death.

Tax loss harvesting opportunities may also exist within the decedent's investment portfolio. Realized losses on securities held in a taxable account can offset capital gains reported on the final return, reducing the estate's tax bill before assets pass to beneficiaries.

What deductions reduce the final tax return

The final return is an often-overlooked opportunity to claim deductions that reduce the estate's tax liability. Medical expenses are particularly valuable because qualifying costs incurred within one year before death but paid by the estate after death can be deducted on either the final Form 1040 or the estate's Form 1041, whichever produces the greater benefit.

Other deductions available on the final return include:

• Unreimbursed medical expenses exceeding 7.5% of adjusted gross income, covering hospital bills, prescription costs, and long-term care fees
• Charitable contributions made by the decedent before death
• State and local income taxes and real estate taxes paid in the year of death
• Mortgage interest on the decedent's primary or secondary residence
• Business expenses if the deceased was self-employed or operated a small business

Business owners who passed away with depreciable assets on their books can claim Depreciation and amortization for the portion of the year through the date of death. Executors should review all business assets and depreciation schedules before finalizing the return.

Beneficiaries inheriting interests in Partnerships receive a stepped-up basis in the inherited interest, which can substantially reduce taxable gain when those interests are eventually sold or liquidated.

How inherited retirement accounts are taxed

Retirement accounts are among the most complex assets to administer after a death. The IRS treats inherited retirement accounts differently depending on the account type and the relationship between the deceased account holder and the beneficiary.

• Surviving spouse beneficiaries have maximum flexibility. They may roll inherited funds into their own IRA, treat the decedent's account as their own, or take distributions as a named beneficiary, thereby deferring required minimum distributions and managing taxes across retirement years.
• Non-spouse beneficiaries inheriting traditional IRAs after December 31, 2019, are generally subject to the SECURE Act ten-year rule, requiring full distribution by the end of the tenth year following the year of death. Eligible designated beneficiaries, including minor children, disabled individuals, and those not more than ten years younger than the deceased, may qualify for exceptions.
• Roth IRA beneficiaries can take tax-free qualified distributions provided the original account has been open for at least 5 years. The ten-year rule also applies to most non-spouse Roth IRA inheritors.
• Required minimum distributions that were due but not taken in the year of death must be withdrawn by the beneficiary and reported as taxable income on their own return.
• Inherited retirement accounts are exempt from the 10% early withdrawal penalty regardless of the beneficiary's age.

The Roth 401k is an increasingly common employer-plan asset within estates. Beneficiaries inheriting a Roth 401k should confirm whether the account satisfies the five-year requirement, as distributions from accounts that have not met this threshold may be partially taxable even when coming from a Roth account.

State tax returns are required after someone dies

Nearly every state requires a final state income tax return in addition to the federal filing, and state deadlines and rules vary considerably. Some states impose their own estate or inheritance taxes with exemption thresholds that differ substantially from the federal $15 million limit, creating additional compliance obligations for many families.

As of 2025, five states levy an inheritance tax on transfers to non-immediate family beneficiaries. Iowa repealed its inheritance tax effective January 1, 2025, leaving Maryland, Nebraska, Kentucky, New Jersey, and Pennsylvania as the remaining states with this tax. Each state defines exempt beneficiaries differently, so executors must review specific rules in every state where the deceased held property.

Reviewing State Tax Deadlines helps executors identify all applicable filing requirements, plan for state returns, and avoid late penalties that compound an already complex estate administration process. Multi-state situations arise when a decedent owned real estate, business interests, or held accounts in multiple jurisdictions, each of which may assert the right to tax portions of the estate.

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Frequently asked questions

Q: Who must file a tax return after someone dies?

A: The executor, administrator, or personal representative of the estate is responsible for filing the final Form 1040. When no formal representative exists, the obligation falls to whoever takes possession of the decedent's property. A surviving spouse may also file a joint return for the year of death if they have not remarried before December 31 of that year.

Q: When is the deceased person's tax return due?

A: The final return is due on April 15 of the year following the year of death, the same deadline as any other individual return. An extension can be filed to push the filing deadline to October 15, but any tax owed remains due by the original April 15 date.

Q: Can the estate claim a refund on the final return?

A: Yes. To receive a refund owed to a deceased person, the personal representative must file Form 1310 alongside the return unless the filer is a surviving spouse or a court-appointed executor with documented authority. The refund is issued to the estate and distributed in accordance with the will or state intestacy law.

Q: How does stepped-up basis affect inherited assets?

A: Inherited assets receive a cost basis equal to their fair market value on the date of the original owner's death. This eliminates built-in capital gains accumulated during the decedent's lifetime. A stock purchased for $50,000 and worth $300,000 at death gives the beneficiary a $300,000 basis, sharply reducing the taxable gain on a future sale.

Q: Are Social Security benefits on the final return?

A: Yes, benefits received by the decedent during the year of death follow the same income inclusion rules that applied during their lifetime, with up to 85% potentially taxable depending on combined income. Benefits received for the month of death or later that are not owed to the decedent must generally be returned to the Social Security Administration.

Q: Does a surviving spouse need to file a separate return?

A: No. A surviving spouse may file a joint return for the year the spouse died, which typically lowers tax liability compared to filing separately. For the two following tax years, the surviving spouse may qualify as a qualifying surviving spouse if they maintain a home for a qualifying dependent child, preserving access to married filing jointly tax rates.

Q: When is Form 1041 required for an estate?

A: Form 1041 is required whenever the estate earns $600 or more in gross income after the date of death. Common income sources that trigger this filing include interest on estate bank accounts, dividends from inherited securities, rental income from inherited property, and business income from a sole proprietorship that continues during administration.