Does estate administration require you to file a tax return?

Serving as the executor of someone’s estate is a big responsibility. If you accept that role, there are certain obligations you must fulfill. You don’t just need to collect and distribute the deceased person’s property. 

You have to also resolve their personal matters and finances. You will initiate and manage the probate process. In addition to closing accounts and paying creditors, you may also have responsibility for handling tax obligations for the deceased. 

Do you have to file a tax return if you serve as the executor of someone’s estate? 

Typically, an executor files someone’s last tax return

In most cases, an executor is the one with access to and control over someone’s finances after they die, so it makes sense that they have tax responsibilities. 

Not only do executors need to pay the taxes owed by the deceased, but they also have to file their final tax returns to resolve any outstanding tax obligations. You will use resources from the estate to pay any outstanding taxes owed and resolve all tax obligations before you distribute estate assets to beneficiaries. 

You may have to file a tax return for the estate itself

The estate itself may have to pay taxes in some cases. If you have to sell off or liquidate property on behalf of the testator, then a tax return for the estate may be necessary. Even small estate sales can generate revenue, as can the sale of real estate or the liquidation of investment assets. If the estate makes more than $600 in sales revenue profit, filing a tax return for the estate is necessary. 

Knowing what obligations you have during estate administration can simplify an otherwise complex process.