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Free tax software 20. Free tax software   Deducción Estándar Table of Contents Qué Hay de Nuevo Introduction Cantidad de la Deducción Estándar Deducción Estándar para DependientesDefinición del ingreso del trabajo. Free tax software Quién Debe Detallar las DeduccionesCuándo detallar las deducciones. Free tax software Personas casadas que presentan la declaración por separado. Free tax software Qué Hay de Nuevo Aumento de la deducción estándar. Free tax software  La deducción estándar para ciertos contribuyentes que no detallen sus deducciones en el Anexo A del Formulario 1040 es mayor en el año 2013 de lo que fue en el año 2012. Free tax software La cantidad de la deducción depende de su estado civil para efectos de la declaración. Free tax software Puede utilizar las Tablas de Deducción Estándar para el año 2013 en este capítulo para calcular la deducción estándar. Free tax software Introduction Este capítulo trata sobre los siguientes temas: Cómo calcular la cantidad de su deducción estándar. Free tax software La deducción estándar para dependientes. Free tax software Quién debe detallar las deducciones. Free tax software La mayoría de los contribuyentes tienen la opción de tomar la deducción estándar o detallar sus deducciones. Free tax software Si tene la opción, puede utilizar el método que resulte en la cantidad menor de impuestos. Free tax software La deducción estándar es una cantidad en dólares que reduce su ingreso tributable. Free tax software La deducción estándar es un beneficio que, para muchos contribuyentes, elimina la necesidad de detallar deducciones, tales como gastos médicos, aportaciones hechas a obras caritativas, e impuestos, en el Anexo A del Formulario 1040. Free tax software La deducción estándar es mayor para los contribuyentes que: Tengan 65 años de edad o más o Sean ciegos. Free tax software Usted se beneficia de la deducción estándar si ésta es mayor que el total de las deducciones detalladas permisibles. Free tax software Personas que no reúnen los requisitos para la deducción estándar. Free tax software   Su deducción estándar es cero y debe detallar todas las deducciones que tenga si: Su estado civil para efectos de la declaración es casado que presenta la declaración por separado y su cónyuge detalla las deducciones en su propia declaración, Presenta una declaración de impuestos para un año tributario corto debido a un cambio en su período contable anual, o Es extranjero no residente o extranjero con doble residencia durante el año. Free tax software Se le considera extranjero con doble residencia si tuvo estatus de ambos extranjero no residente y extranjero residente durante el año. Free tax software Nota. Free tax software Si es extranjero no residente que está casado con un ciudadano estadounidense o es residente extranjero al final del año, puede elegir ser tratado como residente estadounidense. Free tax software Vea la Publicación 519, U. Free tax software S. Free tax software Tax Guide for Aliens (Guía sobre los impuestos federales estadounidenses para extranjeros), en inglés. Free tax software Si elige esta opción, puede tomar la deducción estándar. Free tax software Si alguna exención suya puede ser reclamada en la declaración de impuestos de otra persona (tal como la declaración de sus padres), es posible que su deducción estándar sea limitada. Free tax software Vea Deducción Estándar para Dependientes , más adelante. Free tax software Cantidad de la Deducción Estándar La cantidad de la deducción estándar depende de su estado civil para efectos de la declaración, si tiene 65 años de edad o más o es ciego, y si otro contribuyente puede reclamar una exención por usted. Free tax software Generalmente, las cantidades de deducción estándar se ajustan cada año, conforme a la inflación. Free tax software La cantidad de la deducción estándar para la mayoría de los contribuyentes se muestra en la Tabla 20-1. Free tax software Declaración final de un fallecido. Free tax software   La deducción estándar para la declaración final de impuestos de un fallecido es igual a la que hubiese sido si el fallecido hubiese seguido con vida. Free tax software No obstante, si el fallecido no tenía 65 años de edad o más al morir, no puede reclamar la deducción estándar más alta, concedida por cumplir esa edad. Free tax software Deducción Estándar Más Alta por Edad (65 Años de Edad o Más) Si tiene 65 años de edad o más el último día del año y no detalla sus deducciones, tiene derecho a una deducción estándar más alta. Free tax software Se considera que tiene 65 años de edad el día antes de cumplir sus 65 años. Free tax software Por lo tanto, puede tomar una deducción estándar más alta para el año 2013 si nació antes del 2 de enero de 1949. Free tax software Utilice la Tabla 20-2 para calcular la cantidad de la deducción estándar. Free tax software Deducción Estándar Más Alta por Ceguera Si es ciego en el último día del año y no detalla sus deducciones, tiene derecho a una deducción estándar más alta. Free tax software No está totalmente ciego. Free tax software   Si no está totalmente ciego, tiene que obtener una declaración certificada de un oftalmólogo u optometrista que indique que: Aún cuando tiene sus espejuelos o lentes de contacto puestos, su ojo mejor no registra una cifra de vista mejor que el 20/200 o Su campo visual es de 20 grados o menos. Free tax software   Si es poco probable que la condición de su vista vaya a mejorar más allá de estos límites, dicha declaración debería estipular este hecho. Free tax software Tiene que guardar esta declaración con sus registros. Free tax software   Si su vista se puede corregir más allá de estos límites únicamente con lentes de contacto que sólo pueda usar durante un corto lapso de tiempo debido a dolor, infección o úlceras, usted puede tomar la deducción estándar más alta por ceguera si reúne los demás requisitos. Free tax software Cónyuge de 65 Años o Más o Ciego Puede tomar la deducción estándar mayor si su cónyuge tiene 65 años o más de edad o está ciego y: Ustedes presentan una declaración conjunta o Usted presenta una declaración separada y reclama una exención por su cónyuge porque el mismo no tuvo ningún ingreso bruto; y otro contribuyente no pudo haber reclamado a su cónyuge como dependiente. Free tax software No puede tomar la deducción estándar más alta por una persona que no sea usted o su cónyuge. Free tax software Ejemplos Los siguientes ejemplos muestran cómo determinar su deducción estándar utilizando la Tabla 20-1 y 20-2. Free tax software Ejemplo 1. Free tax software Carlos, de 46 años de edad, y Ana, de 33 años de edad, presentan una declaración conjunta en el año 2013. Free tax software Ninguno de los dos es ciego ni puede ser reclamado como dependiente. Free tax software Ellos optan por no detallar sus deducciones. Free tax software Ellos utilizan la Tabla 20-1. Free tax software La deducción estándar para ambos es $12,200. Free tax software Ejemplo 2. Free tax software Los datos son los mismos que en el Ejemplo 1, salvo que Carlos está ciego al final del año 2013. Free tax software Carlos y Ana utilizan la Tabla 20-2. Free tax software La deducción estándar para ambos es $13,400. Free tax software Ejemplo 3. Free tax software Roberto y María presentan una declaración conjunta para 2013. Free tax software Los dos son mayores de 65 años de edad. Free tax software Ninguno de los dos es ciego y ninguno de los dos puede ser reclamado como dependiente. Free tax software Si ellos no detallan las deducciones, utilizan la Tabla 20-2. Free tax software Su deducción estándar es $14,600. Free tax software Deducción Estándar para Dependientes La deducción estándar de una persona quien otra persona puede reclamar como dependiente en su declaración de impuestos suele limitarse a la cantidad siguiente que sea mayor: $1,000 o El ingreso del trabajo de la persona para el año, más $350 (pero no en exceso de la cantidad normal de la deducción estándar, generalmente $6,100). Free tax software Sin embargo, la deducción estándar podría ser más alta si la persona tiene 65 años de edad o más o si es ciego. Free tax software Si alguna exención suya (o de su cónyuge si presentan una declaración conjunta) se puede reclamar en la declaración de impuestos de otra persona, utilice la Tabla 20-3 para determinar su deducción estándar. Free tax software Definición del ingreso del trabajo. Free tax software   El ingreso del trabajo corresponde a salarios, sueldos, propinas, honorarios por servicios profesionales y otras cantidades recibidas como pagos por trabajo que usted de hecho realiza. Free tax software    Para propósitos de la deducción estándar, el ingreso del trabajo también incluye toda parte de una beca de estudios o de una beca de desarrollo profesional que usted tenga que incluir en el ingreso bruto. Free tax software Vea Becas de estudios y becas de desarrollo profesional en el capítulo 12, para más información sobre qué se considera una beca de estudios o una beca de desarrollo profesional. Free tax software Ejemplo 1. Free tax software Miguel es soltero. Free tax software Sus padres reclaman una exención por él en su declaración de impuestos del año 2013. Free tax software Tiene ingresos de intereses de $780 y un salario de $150. Free tax software No tiene deducciones detalladas. Free tax software Miguel utiliza la Tabla 20-3 para calcular su deducción estándar. Free tax software Él anota $150 (su ingreso del trabajo) en la línea 1, $500 ($150 + $350) en la línea 3, $1,000 (la cantidad mayor entre $500 y $1,000) en la línea 5, y $6,100 en la línea 6. Free tax software Su deducción estándar, la cual se anota en la línea 7a, es de $1,000 (la cantidad menor entre $1,000 y $6,100). Free tax software Ejemplo 2. Free tax software José, un estudiante universitario a tiempo completo con 22 años de edad, puede ser reclamado como dependiente en la declaración de impuestos del año 2013 de sus padres. Free tax software José está casado y presenta una declaración por separado. Free tax software Su esposa no detalla sus deducciones en su declaración. Free tax software José tiene ingresos de intereses de $1,500 y un salario de $3,800. Free tax software Él no tiene deducciones detalladas. Free tax software José utiliza la Tabla 20-3 para calcular su deducción estándar. Free tax software Él anota su ingreso de trabajo de $3,800 en la línea 1. Free tax software Él suma las líneas 1 y 2 y anota $4,150 en la línea 3. Free tax software En la línea 5, él anota $4,150, la cantidad mayor entre las líneas 3 y 4. Free tax software Ya que José está casado y presenta una declaración por separado, él anota $6,100 en la línea 6. Free tax software En la línea 7a, él anota $4,150, como su deducción estándar, porque es menos de $6,100, la cantidad en la línea 6. Free tax software Ejemplo 3. Free tax software Carla, que es soltera, puede ser reclamada como dependiente en la declaración de impuestos del año 2013 de sus padres. Free tax software Tiene 18 años de edad y es ciega. Free tax software Tiene ingresos de intereses de $1,300 y un salario de $2,900. Free tax software Ella no tiene deducciones detalladas. Free tax software Carla consulta la Tabla 20-3 para encontrar su deducción estándar. Free tax software Ella anota su salario de $2,900 en la línea 1. Free tax software Suma las líneas 1 y 2 y anota $3,250 en la línea 3. Free tax software En la línea 5, anota $3,250, la mayor entre las líneas 3 y 4. Free tax software Ya que ella es soltera, Carla anota $6,100 en la línea 6. Free tax software Anota $3,250 en la línea 7a. Free tax software Esta es la menor entre las cantidades de las líneas 5 y 6. Free tax software Ya que ella marcó el recuadro en la parte superior de la hoja, ella anota $1,500 en la línea 7b. Free tax software Luego, suma las cantidades de las líneas 7a y 7b y anota su deducción estándar de $4,750 en la línea 7c. Free tax software Ejemplo 4. Free tax software Edgardo es soltero. Free tax software Sus padres pueden reclamar una exención por él en su declaración del 2013. Free tax software Su salario es de $7,000, tiene ingresos por intereses de $500, y pérdida de negocio de $3,000. Free tax software Él no tiene deducciones detalladas. Free tax software Edgardo utiliza la Tabla 20-3 para calcular su deducción estándar. Free tax software Él anota $4,000 ($7,000 - $ 3,000) en la línea 1. Free tax software Suma las líneas 1 y 2 y anota $4,350 en la línea 3. Free tax software En la línea 5, anota $4,350, la cantidad mayor entre las líneas 3 y 4. Free tax software Ya que él es soltero, Edgardo anota $6,100 en la línea 6. Free tax software En la línea 7a, anota $4,350 como su deducción estándar porque es menor de $6,100, la cantidad que fue anotada en la línea 6. Free tax software Quién Debe Detallar las Deducciones Debe detallar las deducciones si el total de las mismas es mayor que la cantidad de la deducción estándar. Free tax software Además, debe detallar las deducciones si no reúne los requisitos para la deducción estándar, según se explicó anteriormente bajo Personas que no reúnen los requisitos para la deducción estándar . Free tax software Debe calcular primero las deducciones detalladas y comparar aquella cantidad con su deducción estándar para asegurarse de estar utilizando el método que le brinda el mayor beneficio. Free tax software Puede estar sujeto a un límite en algunas de sus deducciones detalladas si su ingreso bruto ajustado es mayor que: $250,000 si es soltero ($275,000 si es cabeza de familia, $300,000 si es casado que presenta una declaración conjunta o viudo(a) que reúne los requisitos; o $150,000 si es casado que presenta la declaración por separado). Free tax software Vea el capítulo 29 o las instrucciones para el Anexo A (Formulario 1040) para más información sobre cómo calcular la cantidad exacta de sus deducciones detalladas. Free tax software Cuándo detallar las deducciones. Free tax software   Es posible que le convenga detallar sus deducciones en el Anexo A (Formulario 1040) si usted: No reúne los requisitos para la deducción estándar o la cantidad que puede reclamar está limitada, Tuvo gastos médicos o dentales cuantiosos que no fueron cubiertos por su seguro durante el año, Pagó intereses e impuestos sobre su vivienda, Tuvo gastos de negocio del empleado cuantiosos que no fueron reembolsados por su empleador u otras deducciones misceláneas, Tuvo pérdidas por hechos fortuitos o por robo cuantiosas que no fueron cubiertas por su seguro, Hizo aportaciones cuantiosas a instituciones de caridad calificadas, o Tiene deducciones detalladas cuyo total es mayor que la deducción estándar a la que, por lo demás, tiene derecho. Free tax software Estas deducciones se explican en los capítulos 21 al 28. Free tax software   Si decide detallar las deducciones, complete el Anexo A y adjúntelo a su Formulario 1040. Free tax software Anote la cantidad de la línea 29 del Anexo A en la línea 40 del Formulario 1040. Free tax software Puede optar por detallar las deducciones para impuestos estatales u otros propósitos. Free tax software   Aun si sus deducciones detalladas son menos que su deducción estándar, puede optar por detallar sus deducciones en la declaración de impuestos federales en vez de tomar la deducción estándar. Free tax software Es posible que le convenga hacer esto si, por ejemplo, el beneficio tributario de detallar sus deducciones en la declaración de impuestos estatales es mayor que el beneficio tributario que pierde si no toma la deducción estándar en la declaración de impuestos federales. Free tax software Para elegir esta opción, tiene que marcar el recuadro de la línea 30 del Anexo A. Free tax software Si cambia de idea. Free tax software   Si no detalla las deducciones y más tarde se da cuenta de que debió haberlas detallado –o si detalla las deducciones y más tarde se da cuenta de que no debió haberlo hecho– puede cambiar su declaración de impuestos presentando el Formulario 1040X, Amended U. Free tax software S. Free tax software Individual Income Tax Return (Declaración enmendada del impuesto federal sobre el ingreso personal en los Estados Unidos), en inglés. Free tax software Vea Declaraciones Enmendadas y Solicitudes de Reembolso en el capítulo 1 para más información sobre las declaraciones enmendadas. Free tax software Personas casadas que presentan la declaración por separado. Free tax software   Puede cambiar de método para tomar deducciones sólo si usted y su cónyuge hacen los mismos cambios. Free tax software Cada uno de los dos tienen que presentar una autorización para permitir la determinación de impuestos adicionales que cualquiera de ustedes pueda adeudar como resultado de dicho cambio. Free tax software    Usted y su cónyuge pueden utilizar el método que les resulte en el total de impuestos más bajo, aunque uno de ustedes quizá pague más impuestos de los que hubiera pagado al utilizar el otro método. Free tax software Tanto usted como su cónyuge tienen que utilizar el mismo método para reclamar deducciones. Free tax software Si uno de ustedes detalla sus deducciones, el otro debe detallar sus deducciones también, porque él o ella no reunirá los requisitos para la deducción estándar. Free tax software Vea Personas que no reúnen los requisitos para la deduccón estándar , anteriormente. Free tax software Tablas de Deducción Estándar para el 2013 Si usted es casado que presenta la declaración por separado y su cónyuge detalla las deducciones, o si usted es extranjero con doble residencia, no puede tomar la deducción estándar aunque haya nacido antes del 2 de enero de 1949 o sea ciego. Free tax software Tabla 20-1. Free tax software Tabla de Deducción Estándar para la Mayoría de las Personas* Si su estado civil para efectos de la  declaración es Entonces su  deducción  estándar es: Soltero o casado que presenta la declaración por separado $6,100 Casado que presenta la declaración conjunta o viudo(a) que reúne los requisitos con hijo dependiente 12,200 Cabeza de familia 8,950 * No utilice esta tabla si nació antes del 2 de enero de 1949, o es ciego, o si alguien más puede reclamar una exención por usted (o por su cónyuge, si es casado que presenta la declaración conjuntamente). Free tax software En vez de ésta, utilice la Tabla 20-2 ó 20-3. Free tax software Tabla 20-2. Free tax software Tabla de la Deducción Estándar para Personas que Nacieron Antes del 2 de enero de 1949 o que sean ciegas* Marque el número correcto de recuadros siguientes. Free tax software Luego pase a la tabla. Free tax software Usted: Nació antes del  2 de enero de 1949□ Es ciego□ Su cónyuge, si reclama  una exención por él o ella: Nació antes del  2 de enero de 1949 □ Es ciego□ Número total de recuadros que marcó   SI su estado civil para   efectos de la  declaración es Y el número en el  recuadro de arriba es ENTONCES su deducción  estándar es: Soltero 1 $7,600   2 9,100 Casado que presenta la 1 $13,400 declaración conjunta o 2 14,600 viudo(a) que reúne los requisitos 3 15,800 con hijo dependiente 4 17,000 Casado que presenta 1 $7,300 la declaración por separado 2 8,500   3 9,700   4 10,900 Cabeza de familia 1 $10,450   2 11,950 *Si alguien más puede reclamar una exención por usted (o su cónyuge, si presenta la declaración conjunta), utilice la tabla 20-3, en vez de ésta. Free tax software Tabla 20-3. Free tax software Tabla de Deducción Estándar para Dependientes Utilice esta hoja de trabajo sólo si alguien más puede reclamar una exención por usted (o por su cónyuge, si es casado que presenta la declaración conjuntamente). Free tax software Marque el número correcto de recuadros más abajo. Free tax software Luego pase a la hoja de trabajo. Free tax software Usted:   Nació antes del 2 de enero de 1949 □ Es ciego □ Su cónyuge, si reclama una exención por él o ella: Nació antes del 2 de enero de 1949 □ Es ciego □ Número total de recuadros que marcó 1. Free tax software Anote su ingreso del trabajo (definido más abajo). Free tax software Si no tiene ninguno, anote -0-. Free tax software 1. Free tax software   2. Free tax software Cantidad adicional. Free tax software 2. Free tax software $350 3. Free tax software Sume las líneas 1 y 2. Free tax software 3. Free tax software   4. Free tax software Deducción estándar mínima. Free tax software 4. Free tax software $1,000 5. Free tax software De las líneas 3 ó 4, anote la cantidad mayor. Free tax software 5. Free tax software   6. Free tax software Anote una de las cantidades siguientes según su estado civil para efectos de la declaración. Free tax software Soltero o Casado que presenta la declaración por separado—$6,100 Casado que presenta la declaración conjunta—$12,200 Cabeza de familia—$8,950 6. Free tax software   7. Free tax software Deducción estándar. Free tax software         a. Free tax software De las líneas 5 ó 6, anote la cantidad que sea menor. Free tax software Si nació después del 1 de enero de 1949, y no es ciego, pare. Free tax software Ésta es su deducción estándar. Free tax software De lo contrario, pase a la línea 7b. Free tax software 7a. Free tax software     b. Free tax software Si nació antes del 2 de enero de 1949, o si es ciego, multiplique $1,500 ($1,200 si es casado) por la cifra en la línea de arriba. Free tax software 7b. Free tax software     c. Free tax software Sume las líneas 7a y 7b. Free tax software Ésta es su deducción estándar para el año 2013. Free tax software 7c. Free tax software   El ingreso del trabajo incluye salarios, sueldos, propinas, honorarios por servicios profesionales y otras remuneraciones recibidas por servicios personales que usted prestó. Free tax software También incluye toda cantidad recibida por concepto de beca que deba incluir en sus ingresos. Free tax software Prev  Up  Next   Home   More Online Publications
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The Free Tax Software

Free tax software Publication 559 - Main Content Table of Contents Personal RepresentativeDuties Fees Received by Personal Representatives Final Income Tax Return for Decedent—Form 1040Name, Address, and Signature When and Where To File Filing Requirements Income To Include Exemptions and Deductions Credits, Other Taxes, and Payments Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Filing Reminders Other Tax InformationTax Benefits for Survivors Income in Respect of a Decedent Deductions in Respect of a Decedent Estate Tax Deduction Gifts, Insurance, and Inheritances Other Items of Income Income Tax Return of an Estate— Form 1041Filing Requirements Income To Include Exemption and Deductions Credits, Tax, and Payments Name, Address, and Signature When and Where To File Distributions to BeneficiariesIncome That Must Be Distributed Currently Other Amounts Distributed Discharge of a Legal Obligation Character of Distributions How and When To Report Bequest Termination of Estate Estate and Gift TaxesApplicable Credit Amount Gift Tax Estate Tax Generation-Skipping Transfer Tax Comprehensive ExampleFinal Return for Decedent—Form 1040 Income Tax Return of an Estate—Form 1041 How To Get Tax HelpLow Income Taxpayer Clinics Personal Representative A personal representative of an estate is an executor, administrator, or anyone who is in charge of the decedent's property. Free tax software Generally, an executor (or executrix) is named in a decedent's will to administer the estate and distribute properties as the decedent has directed. Free tax software An administrator (or administratrix) is usually appointed by the court if no will exists, if no executor was named in the will, or if the named executor cannot or will not serve. Free tax software In general, an executor and an administrator perform the same duties and have the same responsibilities. Free tax software For estate tax purposes, if there is no executor or administrator appointed, qualified, and acting within the United States, the term “executor” includes anyone in actual or constructive possession of any property of the decedent. Free tax software It includes, among others, the decedent's agents and representatives; safe-deposit companies, warehouse companies, and other custodians of property in this country; brokers holding securities of the decedent as collateral; and the debtors of the decedent who are in this country. Free tax software Duties The primary duties of a personal representative are to collect all the decedent's assets, pay his or her creditors, and distribute the remaining assets to the heirs or other beneficiaries. Free tax software The personal representative also must perform the following duties. Free tax software Apply for an employer identification number (EIN) for the estate. Free tax software File all tax returns, including income, estate and gift tax returns, when due. Free tax software Pay the tax determined up to the date of discharge from duties. Free tax software Other duties of the personal representative in federal tax matters are discussed in other sections of this publication. Free tax software If any beneficiary is a nonresident alien, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for information on the personal representative's duties as a withholding agent. Free tax software Penalty. Free tax software   There is a penalty for failure to file a tax return when due unless the failure is due to reasonable cause. Free tax software Reliance on an agent (attorney, accountant, etc. Free tax software ) is not reasonable cause for late filing. Free tax software It is the personal representative's duty to file the returns for the decedent and the estate when due. Free tax software Identification number. Free tax software   The first action you should take if you are the personal representative for the decedent is to apply for an EIN for the estate. Free tax software You should apply for this number as soon as possible because you need to enter it on returns, statements, and other documents you file concerning the estate. Free tax software You also must give the number to payers of interest and dividends and other payers who must file a return concerning the estate. Free tax software   You can get an EIN by applying online at www. Free tax software irs. Free tax software gov (click on "Apply for an EIN Online" under the Tools heading). Free tax software Generally, if you apply online, you will receive your EIN immediately upon completing the application. Free tax software You can also apply using Form SS-4, Application for Employer Identification Number. Free tax software Generally, if you apply by mail, it takes about 4 weeks to get your EIN. Free tax software See the form instructions for other ways to apply. Free tax software   Payers of interest and dividends report amounts on Forms 1099 using the identification number of the person to whom the account is payable. Free tax software After a decedent's death, Forms 1099 must reflect the identification number of the estate or beneficiary to whom the amounts are payable. Free tax software As the personal representative handling the estate, you must furnish this identification number to the payer. Free tax software For example, if interest is payable to the estate, the estate's EIN must be provided to the payer and used to report the interest on Form 1099-INT, Interest Income. Free tax software If the interest is payable to a surviving joint owner, the survivor's identification number, such as an SSN or ITIN, must be provided to the payer and used to report the interest. Free tax software   If the estate or a survivor may receive interest or dividends after you inform the payer of the decedent's death, the payer should give you (or the survivor) a Form W-9, Request for Taxpayer Identification Number and Certification (or a similar substitute form). Free tax software Complete this form to inform the payer of the estate's (or if completed by the survivor, the survivor's) identification number and return it to the payer. Free tax software    Do not use the deceased individual's identifying number to file an individual income tax return after the decedent's final tax return. Free tax software Also do not use it to make estimated tax payments for a tax year after the year of death. Free tax software Penalty. Free tax software   If you do not include the EIN or the taxpayer identification number of another person where it is required on a return, statement, or other document, you are liable for a penalty for each failure, unless you can show reasonable cause. Free tax software You also are liable for a penalty if you do not give the taxpayer identification number of another person when required on a return, statement, or other document. Free tax software Notice of fiduciary relationship. Free tax software   The term fiduciary means any person acting for another person. Free tax software It applies to persons who have positions of trust on behalf of others. Free tax software A personal representative for a decedent's estate is a fiduciary. Free tax software Form 56. Free tax software   If you are appointed to act in a fiduciary capacity for another, you must file a written notice with the IRS stating this. Free tax software Form 56, Notice Concerning Fiduciary Relationship, is used for this purpose. Free tax software See the Instructions for Form 56 for filing requirements and other information. Free tax software   File Form 56 as soon as all the necessary information (including the EIN) is available. Free tax software It notifies the IRS that you, as the fiduciary, are assuming the powers, rights, duties, and privileges of the decedent. Free tax software The notice remains in effect until you notify the IRS (by filing another Form 56) that your fiduciary relationship with the estate has terminated. Free tax software Termination of fiduciary relationship. Free tax software   Form 56 should also be filed to notify the IRS if your fiduciary relationship is terminated or when a successor fiduciary is appointed if the estate has not been terminated. Free tax software See Form 56 and its instructions for more information. Free tax software   At the time of termination of the fiduciary relationship, you may want to file Form 4810, Request for Prompt Assessment Under Internal Revenue Code Section 6501(d), and Form 5495, Request for Discharge From Personal Liability Under Internal Revenue Code Section 2204 or 6905, to wind up your duties as fiduciary. Free tax software See below for a discussion of these forms. Free tax software Request for prompt assessment (charge) of tax. Free tax software   The IRS ordinarily has 3 years from the date an income tax return is filed, or its due date, whichever is later, to charge any additional tax due. Free tax software However, as a personal representative, you may request a prompt assessment of tax after the return has been filed. Free tax software This reduces the time for making the assessment to 18 months from the date the written request for prompt assessment was received. Free tax software This request can be made for any tax return (except the estate tax return) of the decedent or the decedent's estate. Free tax software This may permit a quicker settlement of the tax liability of the estate and an earlier final distribution of the assets to the beneficiaries. Free tax software Form 4810. Free tax software   Form 4810 can be used for making this request. Free tax software It must be filed separately from any other document. Free tax software   As the personal representative for the decedent's estate, you are responsible for any additional taxes that may be due. Free tax software You can request prompt assessment of any of the decedent's taxes (other than federal estate taxes) for any years for which the statutory period for assessment is open. Free tax software This applies even though the returns were filed before the decedent's death. Free tax software Failure to report income. Free tax software   If you or the decedent failed to report substantial amounts of gross income (more than 25% of the gross income reported on the return) or filed a false or fraudulent return, your request for prompt assessment will not shorten the period during which the IRS may assess the additional tax. Free tax software However, such a request may relieve you of personal liability for the tax if you did not have knowledge of the unpaid tax. Free tax software Request for discharge from personal liability for tax. Free tax software   An executor can make a request for discharge from personal liability for a decedent's income, gift, and estate taxes. Free tax software The request must be made after the returns for those taxes are filed. Free tax software To make the request, file Form 5495. Free tax software For this purpose, an executor is an executor or administrator that is appointed, qualified, and acting within the United States. Free tax software   Within 9 months after receipt of the request, the IRS will notify the executor of the amount of taxes due. Free tax software If this amount is paid, the executor will be discharged from personal liability for any future deficiencies. Free tax software If the IRS has not notified the executor, he or she will be discharged from personal liability at the end of the 9-month period. Free tax software    Even if the executor is discharged from personal liability, the IRS will still be able to assess tax deficiencies against the executor to the extent he or she still has any of the decedent's property. Free tax software Insolvent estate. Free tax software   Generally, if a decedent's estate is insufficient to pay all the decedent's debts, the debts due to the United States must be paid first. Free tax software Both the decedent's federal income tax liabilities at the time of death and the estate's income tax liability are debts due to the United States. Free tax software The personal representative of an insolvent estate is personally responsible for any tax liability of the decedent or of the estate if he or she had notice of such tax obligations or failed to exercise due care in determining if such obligations existed before distribution of the estate's assets and before being discharged from duties. Free tax software The extent of such personal responsibility is the amount of any other payments made before paying the debts due to the United States, except where such other debt paid has priority over the debts due to the United States. Free tax software Income tax liabilities need not be formally assessed for the personal representative to be liable if he or she was aware or should have been aware of their existence. Free tax software Fees Received by Personal Representatives All personal representatives must include fees paid to them from an estate in their gross income. Free tax software If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on your Form 1040, line 21. Free tax software If you are in the trade or business of being an executor, report fees received from the estate as self-employment income on Schedule C or Schedule C-EZ of your Form 1040. Free tax software If the estate operates a trade or business and you, as executor, actively participate in the trade or business while fulfilling your duties, any fees you receive related to the operation of the trade or business must be reported as self-employment income on Schedule C (or Schedule C-EZ) of your Form 1040. Free tax software Final Income Tax Return for Decedent—Form 1040 The personal representative (defined earlier) must file the final income tax return (Form 1040) of the decedent for the year of death and any returns not filed for preceding years. Free tax software A surviving spouse, under certain circumstances, may have to file the returns for the decedent. Free tax software See Joint Return, later. Free tax software Return for preceding year. Free tax software   If an individual died after the close of the tax year, but before the return for that year was filed, the return for the year just closed will not be the final return. Free tax software The return for that year will be a regular return and the personal representative must file it. Free tax software Example. Free tax software Samantha Smith died on March 21, 2013, before filing her 2012 tax return. Free tax software Her personal representative must file her 2012 return by April 15, 2013. Free tax software Her final tax return covering the period from January 1, 2013, to March 20, 2013, is due April 15, 2014. Free tax software Name, Address, and Signature Write the word “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Free tax software If filing a joint return, write the name and address of the decedent and the surviving spouse in the name and address fields. Free tax software If a joint return is not being filed, write the decedent's name in the name field and the personal representative's name and address in the address field. Free tax software Third party designee. Free tax software   You can check the “Yes” box in the Third Party Designee area on page 2 of the return to authorize the IRS to discuss the return with a friend, family member, or any other person you choose. Free tax software This allows the IRS to call the person you identified as the designee to answer any questions that may arise during the processing of the return. Free tax software It also allows the designee to perform certain actions. Free tax software See the Instructions for Form 1040 for details. Free tax software Signature. Free tax software   If a personal representative has been appointed, that person must sign the return. Free tax software If it is a joint return, the surviving spouse must also sign it. Free tax software If no personal representative has been appointed, the surviving spouse (on a joint return) signs the return and writes in the signature area “Filing as surviving spouse. Free tax software ” If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Free tax software ” Paid preparer. Free tax software   If you pay someone to prepare, assist in preparing, or review the tax return, that person must sign the return and fill in the other blanks in the Paid Preparer Use Only area of the return. Free tax software See the Form 1040 instructions for details. Free tax software When and Where To File The final income tax return is due at the same time the decedent's return would have been due had death not occurred. Free tax software A final return for a decedent who was a calendar year taxpayer is generally due on April 15 following the year of death, regardless of when during that year death occurred. Free tax software However, when the due date falls on a Saturday, Sunday, or legal holiday, the return is filed timely if filed by the next business day. Free tax software The tax return must be prepared for the year of death regardless of when during the year death occurred. Free tax software Generally, you must file the final income tax return of the decedent with the Internal Revenue Service Center for the place where you live. Free tax software A tax return for a decedent can be electronically filed. Free tax software A personal representative may also obtain an income tax filing extension on behalf of a decedent. Free tax software Filing Requirements The gross income, age, and filing status of a decedent generally determine whether a return must be filed. Free tax software Gross income is all income received by an individual from any source in the form of money, goods, property, and services that is not tax-exempt. Free tax software It includes gross receipts from self-employment, but if the business involves manufacturing, merchandising, or mining, subtract any cost of goods sold. Free tax software In general, filing status depends on whether the decedent was considered single or married at the time of death. Free tax software See the income tax return instructions or Publication 501, Exemptions, Standard Deduction, and Filing Information. Free tax software Refund A return must be filed to obtain a refund if tax was withheld from salaries, wages, pensions, or annuities, or if estimated tax was paid, even if a return is not otherwise required to be filed. Free tax software Also, the decedent may be entitled to other credits that result in a refund. Free tax software These advance payments of tax and credits are discussed later under Credits, Other Taxes, and Payments. Free tax software Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. Free tax software   Form 1310 does not have to be filed if you are claiming a refund and you are: A surviving spouse filing an original or amended joint return with the decedent, or A court-appointed or certified personal representative filing the decedent’s original return and a copy of the court certificate showing your appointment is attached to the return. Free tax software   If the personal representative is filing a claim for refund on Form 1040X, Amended U. Free tax software S. Free tax software Individual Income Tax Return, or Form 843, Claim for Refund and Request for Abatement, and the court certificate has already been filed with the IRS, attach Form 1310 and write “Certificate Previously Filed” at the bottom of the form. Free tax software Example. Free tax software Edward Green died before filing his tax return. Free tax software You were appointed the personal representative for Edward's estate, and you file his Form 1040 showing a refund due. Free tax software You do not need Form 1310 to claim the refund if you attach a copy of the court certificate showing you were appointed the personal representative. Free tax software    If you are a surviving spouse and you receive a tax refund check in both your name and your deceased spouse's name, you can have the check reissued in your name alone. Free tax software Return the joint-name check marked “VOID” to your local IRS office or the service center where you mailed your return, along with a written request for reissuance of the refund check. Free tax software A new check will be issued in your name and mailed to you. Free tax software Death certificate. Free tax software   When filing the decedent's final income tax return, do not attach the death certificate or other proof of death to the final return. Free tax software Instead, keep it for your records and provide it if requested. Free tax software Nonresident Alien If the decedent was a nonresident alien who would have had to file Form 1040NR, U. Free tax software S. Free tax software Nonresident Alien Income Tax Return, you must file that form for the decedent's final tax year. Free tax software See the Instructions for Form 1040NR for the filing requirements, due date, and where to file. Free tax software Joint Return Generally, the personal representative and the surviving spouse can file a joint return for the decedent and the surviving spouse. Free tax software However, the surviving spouse alone can file the joint return if no personal representative has been appointed before the due date for filing the final joint return for the year of death. Free tax software This also applies to the return for the preceding year if the decedent died after the close of the preceding tax year and before filing the return for that year. Free tax software The income of the decedent that was includible on his or her return for the year up to the date of death (see Income To Include, later) and the income of the surviving spouse for the entire year must be included in the final joint return. Free tax software A final joint return with the decedent cannot be filed if the surviving spouse remarried before the end of the year of the decedent's death. Free tax software The filing status of the decedent in this instance is married filing a separate return. Free tax software For information about tax benefits to which a surviving spouse may be entitled, see Tax Benefits for Survivors, later, under Other Tax Information. Free tax software Personal representative may revoke joint return election. Free tax software   A court-appointed personal representative may revoke an election to file a joint return previously made by the surviving spouse alone. Free tax software This is done by filing a separate return for the decedent within one year from the due date of the return (including any extensions). Free tax software The joint return made by the surviving spouse will then be regarded as the separate return of that spouse by excluding the decedent's items and refiguring the tax liability. Free tax software Relief from joint liability. Free tax software   In some cases, one spouse may be relieved of joint liability for tax, interest, and penalties on a joint return for items of the other spouse that were incorrectly reported on the joint return. Free tax software If the decedent qualified for this relief while alive, the personal representative can pursue an existing request, or file a request, for relief from joint liability. Free tax software For information on requesting this relief, see Publication 971, Innocent Spouse Relief. Free tax software Income To Include The decedent's income includible on the final return is generally determined as if the person were still alive except that the taxable period is usually shorter because it ends on the date of death. Free tax software The method of accounting regularly used by the decedent before death also determines the income includible on the final return. Free tax software This section explains how some types of income are reported on the final return. Free tax software For more information about accounting methods, see Publication 538, Accounting Periods and Methods. Free tax software Cash Method If the decedent accounted for income under the cash method, only those items actually or constructively received before death are included on the final return. Free tax software Constructive receipt of income. Free tax software   Interest from coupons on the decedent's bonds is constructively received by the decedent if the coupons matured in the decedent's final tax year, but had not been cashed. Free tax software Include the interest income on the final return. Free tax software   Generally, a dividend is considered constructively received if it was available for use by the decedent without restriction. Free tax software If the corporation customarily mailed its dividend checks, the dividend was includible when received. Free tax software If the individual died between the time the dividend was declared and the time it was received in the mail, the decedent did not constructively receive it before death. Free tax software Do not include the dividend in the final return. Free tax software Accrual Method Generally, under an accrual method of accounting, income is reported when earned. Free tax software If the decedent used an accrual method, only the income items normally accrued before death are included on the final return. Free tax software Interest and Dividend Income (Forms 1099) Form(s) 1099 reporting interest and dividends earned by the decedent before death should be received and the amounts included on the decedent's final return. Free tax software A separate Form 1099 should show the interest and dividends earned after the date of the decedent's death and paid to the estate or other recipient that must include those amounts on its return. Free tax software You can request corrected Forms 1099 if these forms do not properly reflect the right recipient or amounts. Free tax software For example, a Form 1099-INT, reporting interest payable to the decedent, may include income that should be reported on the final income tax return of the decedent, as well as income that the estate or other recipient should report, either as income earned after death or as income in respect of the decedent (discussed later). Free tax software For income earned after death, you should ask the payer for a Form 1099 that properly identifies the recipient (by name and identification number) and the proper amount. Free tax software If that is not possible, or if the form includes an amount that represents income in respect of the decedent, report the interest as shown next under How to report. Free tax software See U. Free tax software S. Free tax software savings bonds acquired from decedent under Income in Respect of a Decedent, later, for information on savings bond interest that may have to be reported on the final return. Free tax software How to report. Free tax software   If you are preparing the decedent's final return and you have received a Form 1099-INT for the decedent that includes amounts belonging to the decedent and to another recipient (the decedent's estate or another beneficiary), report the total interest shown on Form 1099-INT on Schedule B (Form 1040A or 1040), Interest and Ordinary Dividends. Free tax software Next, enter a subtotal of the interest shown on Forms 1099, and the interest reportable from other sources for which you did not receive Forms 1099. Free tax software Then, show any interest (including any interest you receive as a nominee) belonging to another recipient separately and subtract it from the subtotal. Free tax software Identify the amount of this adjustment as “Nominee Distribution” or other appropriate designation. Free tax software   Report dividend income for which you received a Form 1099-DIV, Dividends and Distributions, on the appropriate schedule using the same procedure. Free tax software    Note. Free tax software If the decedent received amounts as a nominee, you must give the actual owner a Form 1099, unless the owner is the decedent's spouse. Free tax software See General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G) for more information on filing Forms 1099. Free tax software Partnership Income The death of a partner closes the partnership's tax year for that partner. Free tax software Generally, it does not close the partnership's tax year for the remaining partners. Free tax software The decedent's distributive share of partnership items must be figured as if the partnership's tax year ended on the date the partner died. Free tax software To avoid an interim closing of the partnership books, the partners can agree to estimate the decedent's distributive share by prorating the amounts the partner would have included for the entire partnership tax year. Free tax software On the decedent's final return, include the decedent's distributive share of partnership items for the following periods. Free tax software The partnership's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Free tax software The period, if any, from the end of the partnership's tax year in (1) to the decedent's date of death. Free tax software Example. Free tax software Mary Smith was a partner in XYZ partnership and reported her income on a tax year ending December 31. Free tax software The partnership uses a tax year ending June 30. Free tax software Mary died August 31, 2013, and her estate established its tax year through August 31. Free tax software The distributive share of partnership items based on the decedent's partnership interest is reported as follows. Free tax software Final Return for the Decedent—January 1 through August 31, 2013, includes XYZ partnership items from (a) the partnership tax year ending June 30, 2013, and (b) the partnership tax year beginning July 1, 2013, and ending August 31, 2013 (the date of death). Free tax software Income Tax Return of the Estate—September 1, 2013, through August 31, 2014, includes XYZ partnership items for the period September 1, 2013, through June 30, 2014. Free tax software S Corporation Income If the decedent was a shareholder in an S corporation, include on the final return the decedent's share of the S corporation's items of income, loss, deduction, and credit for the following periods. Free tax software The corporation's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Free tax software The period, if any, from the end of the corporation's tax year in (1) to the decedent's date of death. Free tax software Self-Employment Income Include self-employment income actually or constructively received or accrued, depending on the decedent's accounting method. Free tax software For self-employment tax purposes only, the decedent's self-employment income will include the decedent's distributive share of a partnership's income or loss through the end of the month in which death occurred. Free tax software For this purpose, the partnership's income or loss is considered to be earned ratably over the partnership's tax year. Free tax software Community Income If the decedent was married and domiciled in a community property state, half of the income received and half of the expenses paid during the decedent's tax year by either the decedent or spouse may be considered to be the income and expenses of the other. Free tax software For more information, see Publication 555, Community Property. Free tax software HSA, Archer MSA, or Medicare Advantage MSA The treatment of an HSA (health savings account), an Archer MSA (medical savings account), or a Medicare Advantage MSA at the death of the account holder, depends on who acquires the interest in the account. Free tax software If the decedent's estate acquires the interest, the fair market value (FMV) of the assets in the account on the date of death is included in income on the decedent's final return. Free tax software The estate tax deduction, discussed later, does not apply to this amount. Free tax software If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Free tax software For other information on HSAs, Archer MSAs, or Medicare Advantage MSAs, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. Free tax software Coverdell Education Savings Account (ESA) Generally, the balance in a Coverdell ESA must be distributed within 30 days after the individual for whom the account was established reaches age 30, or dies, whichever is earlier. Free tax software The treatment of the Coverdell ESA at the death of an individual under age 30 depends on who acquires the interest in the account. Free tax software If the decedent's estate acquires the interest, the earnings on the account must be included on the final income tax return of the decedent. Free tax software The estate tax deduction, discussed later, does not apply to this amount. Free tax software If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Free tax software The age 30 limitation does not apply if the individual for whom the account was established or the beneficiary that acquires the account is an individual with special needs. Free tax software This includes an individual who, because of a physical, mental, or emotional condition (including a learning disability), requires additional time to complete his or her education. Free tax software For more information on Coverdell ESAs, see Publication 970, Tax Benefits for Education. Free tax software Accelerated Death Benefits Accelerated death benefits are amounts received under a life insurance contract before the death of the insured individual. Free tax software These benefits also include amounts received on the sale or assignment of the contract to a viatical settlement provider. Free tax software Generally, if the decedent received accelerated death benefits on the life of a terminally or chronically ill individual, whether on his or her own life or on the life of another person, those benefits are not included in the decedent's income. Free tax software For more information, see the discussion under Gifts, Insurance, and Inheritances under Other Tax Information, later. Free tax software Exemptions and Deductions Generally, the rules for exemptions and deductions allowed to an individual also apply to the decedent's final income tax return. Free tax software Show on the final return deductible items the decedent paid (or accrued, if the decedent reported deductions on an accrual method) before death. Free tax software This section contains a detailed discussion of medical expenses because the tax treatment of the decedent's medical expenses can be different. Free tax software See Medical Expenses, later. Free tax software Exemptions You can claim the decedent's personal exemption on the final income tax return. Free tax software If the decedent was another person's dependent (for example, a parent's), you cannot claim the personal exemption on the decedent's final return. Free tax software Standard Deduction If you do not itemize deductions on the final return, the full amount of the appropriate standard deduction is allowed regardless of the date of death. Free tax software For information on the appropriate standard deduction, see the Form 1040 income tax return instructions or Publication 501. Free tax software Medical Expenses Medical expenses paid before death by the decedent are deductible, subject to limits, on the final income tax return if deductions are itemized. Free tax software This includes expenses for the decedent, as well as for the decedent's spouse and dependents. Free tax software Beginning in 2013, medical expenses exceeding 10% of adjusted gross income (AGI) may be deducted, unless the decedent or their spouse is age 65 or older. Free tax software In that case medical expenses exceeding 7. Free tax software 5% of AGI may be deducted. Free tax software Qualified medical expenses are not deductible if paid with a tax-free distribution from an HSA or an Archer MSA. Free tax software Election for decedent's expenses. Free tax software   Medical expenses not paid before death are liabilities of the estate and are shown on the federal estate tax return (Form 706). Free tax software However, if medical expenses for the decedent are paid out of the estate during the 1-year period beginning with the day after death, you can elect to treat all or part of the expenses as paid by the decedent at the time they were incurred. Free tax software   If you make the election, you can claim all or part of the expenses on the decedent's income tax return (if deductions are itemized) rather than on the federal estate tax return (Form 706). Free tax software You can deduct expenses incurred in the year of death on the final income tax return. Free tax software You should file an amended return (Form 1040X) for medical expenses incurred in an earlier year, unless the statutory period for filing a claim for that year has expired. Free tax software   The amount you can deduct on the income tax return is the amount above 10% of adjusted gross income (or 7. Free tax software 5% of adjusted gross income if the decedent or the decedent's spouse was born before January 2, 1949). Free tax software Amounts not deductible because of this percentage cannot be claimed on the federal estate tax return. Free tax software Making the election. Free tax software   You make the election by attaching a statement, in duplicate, to the decedent's income tax return or amended return. Free tax software The statement must state that you have not claimed the amount as an estate tax deduction, and that the estate waives the right to claim the amount as a deduction. Free tax software This election applies only to expenses incurred for the decedent, not to expenses incurred to provide medical care for dependents. Free tax software Example. Free tax software Richard Brown used the cash method of accounting and filed his income tax return on a calendar year basis. Free tax software Richard died on June 1, 2013, at the age of 78, after incurring $800 in medical expenses. Free tax software Of that amount, $500 was incurred in 2012 and $300 was incurred in 2013. Free tax software Richard itemized his deductions when he filed his 2012 income tax return. Free tax software The personal representative of the estate paid the entire $800 liability in August 2013. Free tax software The personal representative may file an amended return (Form 1040X) for 2012 claiming the $500 medical expense as a deduction, subject to the 7. Free tax software 5% limit. Free tax software The $300 of expenses incurred in 2013 can be deducted on the final income tax return if deductions are itemized, subject to the 7. Free tax software 5% limit. Free tax software The personal representative must file a statement in duplicate with each return stating that these amounts have not been claimed on the federal estate tax return (Form 706), and waiving the right to claim such a deduction on Form 706 in the future. Free tax software Medical expenses not paid by estate. Free tax software   If you paid medical expenses for your deceased spouse or dependent, claim the expenses on your tax return for the year in which you paid them, whether they are paid before or after the decedent's death. Free tax software If the decedent was a child of divorced or separated parents, the medical expenses can usually be claimed by both the custodial and noncustodial parent to the extent paid by that parent during the year. Free tax software Insurance reimbursements. Free tax software   Insurance reimbursements of previously deducted medical expenses due a decedent at the time of death and later received by the decedent's estate are includible in the income tax return of the estate (Form 1041) for the year the reimbursements are received. Free tax software The reimbursements are also includible in the decedent's gross estate. Free tax software No deduction for funeral expenses can be taken on the final Form 1040 of a decedent. Free tax software These expenses may be deductible for estate tax purposes on Form 706. Free tax software Deduction for Losses A decedent's net operating loss deduction from a prior year and any capital losses (including capital loss carryovers) can be deducted only on the decedent's final income tax return. Free tax software A net operating loss on the decedent's final income tax return can be carried back to prior years. Free tax software (See Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Free tax software ) You cannot deduct any unused net operating loss or capital loss on the estate's income tax return. Free tax software At-risk loss limits. Free tax software   Special at-risk rules apply to most activities that are engaged in as a trade or business or for the production of income. Free tax software   These rules limit the deductible loss to the amount which the individual was considered at-risk in the activity. Free tax software An individual generally will be considered at-risk to the extent of the money and the adjusted basis of property that he or she contributed to the activity and certain amounts the individual borrowed for use in the activity. Free tax software An individual will be considered at-risk for amounts borrowed only if he or she was personally liable for the repayment or if the amounts borrowed were secured by property other than that used in the activity. Free tax software The individual is not considered at-risk for borrowed amounts if the lender has an interest in the activity or if the lender is related to a person who has an interest in the activity. Free tax software For more information, see Publication 925, Passive Activity and At-Risk Rules. Free tax software Passive activity rules. Free tax software   A passive activity is any trade or business activity in which the taxpayer does not materially participate. Free tax software To determine material participation, see Publication 925. Free tax software Rental activities are passive activities regardless of the taxpayer's participation, unless the taxpayer meets certain eligibility requirements. Free tax software   Individuals, estates, and trusts can offset passive activity losses only against passive activity income. Free tax software Passive activity losses or credits not allowed in one tax year can be carried forward to the next year. Free tax software   If a passive activity interest is transferred because a taxpayer dies, the accumulated unused passive activity losses are allowed as a deduction against the decedent's income in the year of death. Free tax software Losses are allowed only to the extent they are greater than the excess of the transferee's (recipient of the interest transferred) basis in the property over the decedent's adjusted basis in the property immediately before death. Free tax software The part of the accumulated losses equal to the excess is not allowed as a deduction for any tax year. Free tax software   Use Form 8582, Passive Activity Loss Limitations, to summarize losses and income from passive activities and to figure the amounts allowed. Free tax software For more information, see Publication 925. Free tax software Credits, Other Taxes, and Payments Discussed below are some of the tax credits, types of taxes that may be owed, income tax withheld, and estimated tax payments reported on the final return of a decedent. Free tax software Credits On the final income tax return, you can claim any tax credits that applied to the decedent before death. Free tax software Some of these credits are discussed next. Free tax software Earned income credit. Free tax software   If the decedent was an eligible individual, you can claim the earned income credit on the decedent's final return even though the return covers less than 12 months. Free tax software If the allowable credit is more than the tax liability for the year, the excess is refunded. Free tax software   For more information, see Publication 596, Earned Income Credit (EIC). Free tax software Credit for the elderly or the disabled. Free tax software   This credit is allowable on a decedent's final income tax return if the decedent met both of the following requirements in the year of death. Free tax software The decedent: Was a “qualified individual,” and Had income (adjusted gross income (AGI) and nontaxable social security and pensions) less than certain limits. Free tax software   For details on qualifying for or figuring the credit, see Publication 524, Credit for the Elderly or the Disabled. Free tax software Child tax credit. Free tax software   If the decedent had a qualifying child, you may be able to claim the child tax credit on the decedent's final return even though the return covers less than 12 months. Free tax software You may be able to claim the additional child tax credit and get a refund if the credit is more than the decedent's liability. Free tax software For more information, see the Instructions for Form 1040. Free tax software Adoption credit. Free tax software   Depending upon when the adoption was finalized, this credit may be taken on a decedent's final income tax return if the decedent: Adopted an eligible child and paid qualified adoption expenses, or Has a carryforward of an adoption credit from a prior year. Free tax software   Also, if the decedent is survived by a spouse who meets the filing status of qualifying widow(er), unused adoption credit may be carried forward and used following the death of the decedent. Free tax software See Form 8839, Qualified Adoption Expenses, and its instructions for more details. Free tax software General business tax credit. Free tax software   The general business credit available to a taxpayer is limited. Free tax software Any credit arising in a tax year beginning before 1998 that has not been used up can be carried forward for up to 15 years. Free tax software Any unused credit arising in a tax year beginning after 1997 has a 1-year carryback and a 20-year carryforward period. Free tax software   After the carryforward period, a deduction may be allowed for any unused business credit. Free tax software If the taxpayer dies before the end of the carryforward period, the deduction generally is allowed in the year of death. Free tax software   For more information on the general business credit, see Publication 334, Tax Guide for Small Business. Free tax software Other Taxes Taxes other than income tax that may be owed on the final return of a decedent include self-employment tax and alternative minimum tax, which are reported on Form 1040. Free tax software Self-employment tax. Free tax software   Self-employment tax may be owed on the final return if either of the following applied to the decedent in the year of death: Net earnings from self-employment (excluding income described in (2)) were $400 or more; or Wages from services performed as a church employee were $108. Free tax software 28 or more. Free tax software Alternative minimum tax (AMT). Free tax software   The tax laws give special treatment to certain types of income and allow special deductions and credits for certain types of expenses. Free tax software The alternative minimum tax (AMT) was enacted so taxpayers who benefit from these laws still pay at least a minimum amount of tax. Free tax software In general, the AMT is the excess of the tentative minimum tax over the regular tax shown on the return. Free tax software Form 6251. Free tax software    Use Form 6251, Alternative Minimum Tax—Individuals, to determine if this tax applies to the decedent. Free tax software See the form instructions for information on when you must attach Form 6251 to Form 1040. Free tax software Form 8801. Free tax software   If the decedent paid AMT in a previous year or had a credit carryforward, the decedent may be eligible for a minimum tax credit. Free tax software See Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts. Free tax software Payments of Tax The income tax withheld from the decedent's salary, wages, pensions, or annuities, and the amount paid as estimated tax are credits (advance payments of tax) that must be claimed on the final return. Free tax software Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Income tax liability may be forgiven for a decedent who dies due to service in a combat zone, due to military or terrorist actions, as a result of a terrorist attack, or while serving in the line of duty as an astronaut. Free tax software Combat Zone If a member of the Armed Forces of the United States dies while in active service in a combat zone or from wounds, disease, or injury incurred in a combat zone, the decedent's income tax liability is abated (forgiven) for the entire year in which death occurred and for any prior tax year ending on or after the first day the person served in a combat zone in active service. Free tax software For this purpose, a qualified hazardous duty area is treated as a combat zone. Free tax software If the tax (including interest, additions to the tax, and additional amounts) for these years has been assessed, the assessment will be forgiven. Free tax software If the tax has been collected (regardless of the date of collection), that tax will be credited or refunded. Free tax software Any of the decedent's income tax for tax years before those mentioned above that remains unpaid as of the actual (or presumptive) date of death will not be assessed. Free tax software If any unpaid tax (including interest, additions to the tax, and additional amounts) has been assessed, this assessment will be forgiven. Free tax software Also, if any tax was collected after the date of death, that amount will be credited or refunded. Free tax software The date of death of a member of the Armed Forces reported as missing in action or as a prisoner of war is the date his or her name is removed from missing status for military pay purposes. Free tax software This is true even if death actually occurred earlier. Free tax software For other tax information for members of the Armed Forces, see Publication 3, Armed Forces' Tax Guide. Free tax software Military or Terrorist Actions The decedent's income tax liability is forgiven if, at death, he or she was a military or civilian employee of the United States who died because of wounds or injury incurred: While a U. Free tax software S. Free tax software employee, and In a military or terrorist action. Free tax software The forgiveness applies to the tax year in which death occurred and for any earlier tax year, beginning with the year before the year in which the wounds or injury occurred. Free tax software Example. Free tax software The income tax liability of a civilian employee of the United States who died in 2013 because of wounds incurred while a U. Free tax software S. Free tax software employee in a terrorist attack that occurred in 2008 will be forgiven for 2013 and for all prior tax years in the period 2007 through 2012. Free tax software Refunds are allowed for the tax years for which the period for filing a claim for refund has not ended, as discussed later. Free tax software Military or terrorist action defined. Free tax software   A military or terrorist action means the following. Free tax software Any terrorist activity that most of the evidence indicates was directed against the United States or any of its allies. Free tax software Any military action involving the U. Free tax software S. Free tax software Armed Forces and resulting from violence or aggression against the United States or any of its allies, or the threat of such violence or aggression. Free tax software   Terrorist activity includes criminal offenses intended to coerce, intimidate, or retaliate against the government or civilian population. Free tax software Military action does not include training exercises. Free tax software Any multinational force in which the United States is participating is treated as an ally of the United States. Free tax software Determining if a terrorist activity or military action has occurred. Free tax software   You may rely on published guidance from the IRS to determine if a particular event is considered a terrorist activity or military action. Free tax software Specified Terrorist Victim The Victims of Terrorism Tax Relief Act of 2001 (the Act) provides tax relief for those injured or killed as a result of terrorist attacks, certain survivors of those killed as a result of terrorist attacks, and others who were affected by terrorist attacks. Free tax software Under the Act, the federal income tax liability of those killed in the following attacks (specified terrorist victim) is forgiven for certain tax years. Free tax software The April 19, 1995, terrorist attack on the Alfred P. Free tax software Murrah Federal Building (Oklahoma City). Free tax software The September 11, 2001, terrorist attacks. Free tax software The terrorist attacks involving anthrax occurring after September 10, 2001, and before January 1, 2002. Free tax software The Act also exempts from federal income tax the following types of income. Free tax software Qualified disaster relief payments made after September 10, 2001, to cover personal, family, living, or funeral expenses incurred because of a terrorist attack. Free tax software Certain disability payments received in tax years ending after September 10, 2001, for injuries sustained in a terrorist attack. Free tax software Certain death benefits paid by an employer to the survivor of an employee because the employee died as a result of a terrorist attack. Free tax software Payments from the September 11th Victim Compensation Fund 2001. Free tax software The Act also reduces the estate tax of individuals who die as a result of a terrorist attack. Free tax software See Publication 3920, Tax Relief for Victims of Terrorist Attacks, for more information. Free tax software Astronauts Legislation extended the tax relief available under the Victims of Terrorism Tax Relief Act of 2001 (the Act) to astronauts who died in the line of duty after December 31, 2002. Free tax software The decedent's income tax liability is forgiven for the tax year in which death occurs, and for the tax year prior to death. Free tax software For information on death benefit payments and the reduction of federal estate taxes, see Publication 3920. Free tax software However, the discussions in that publication under Death Benefits and Estate Tax Reduction should be modified for astronauts (for example, by using the date of death of the astronaut instead of September 11, 2001). Free tax software For more information on the Act, see Publication 3920. Free tax software Claim for Credit or Refund If any of these tax-forgiveness situations applies to a prior year tax, any tax paid for which the period for filing a claim has not ended will be credited or refunded. Free tax software If any tax is still due, it will be canceled. Free tax software The normal period for filing a claim for credit or refund is 3 years after the return was filed or 2 years after the tax was paid, whichever is later. Free tax software If death occurred in a combat zone or from wounds, disease, or injury incurred in a combat zone, the period for filing the claim is extended by: The amount of time served in the combat zone (including any period in which the individual was in missing status), plus The period of continuous qualified hospitalization for injury from service in the combat zone, if any, plus The next 180 days. Free tax software Qualified hospitalization means any hospitalization outside the United States and any hospitalization in the United States of not more than 5 years. Free tax software This extended period for filing the claim also applies to a member of the Armed Forces who was deployed outside the United States in a designated contingency operation. Free tax software Filing a claim. Free tax software   Use the following procedures to file a claim. Free tax software If a U. Free tax software S. Free tax software individual income tax return (Form 1040, 1040A, or 1040EZ) has not been filed, you should make a claim for refund of any withheld income tax or estimated tax payments by filing Form 1040. Free tax software Form W-2, Wage and Tax Statement, must accompany all returns. Free tax software If a U. Free tax software S. Free tax software individual income tax return has been filed, you should make a claim for refund by filing Form 1040X. Free tax software You must file a separate Form 1040X for each year in question. Free tax software   You must file these returns and claims at the following address for regular mail (U. Free tax software S. Free tax software Postal Service). Free tax software    Internal Revenue Service 333 W. Free tax software Pershing, P5–6503 Kansas City, MO 64108   Identify all returns and claims for refund by writing “Iraq—KIA,” “Enduring Freedom—KIA,” “Kosovo Operation—KIA,” “Desert Storm—KIA,” or “Former Yugoslavia—KIA” in bold letters on the top of page 1 of the return or claim. Free tax software On the applicable return, write the same phrase on the line for total tax. Free tax software If the individual was killed in a terrorist or military action, put “KITA” on the front of the return and on the line for total tax. Free tax software   Include an attachment showing the computation of the decedent's tax liability and a computation of the amount to be forgiven. Free tax software On joint returns, make an allocation of the tax as described below under Joint returns. Free tax software If you cannot make a proper allocation, attach a statement of all income and deductions allocable to each spouse and the IRS will make the proper allocation. Free tax software   You must attach Form 1310 to all returns and claims for refund. Free tax software However, for exceptions to filing Form 1310, see Form 1310. Free tax software Statement of Person Claiming Refund Due a Deceased Taxpayer, under Refund, earlier. Free tax software   You must also attach proof of death that includes a statement that the individual was a U. Free tax software S. Free tax software employee on the date of injury and on the date of death and died as the result of a military or terrorist action. Free tax software For military and civilian employees of the Department of Defense, attach DD Form 1300, Report of Casualty. Free tax software For other U. Free tax software S. Free tax software civilian employees killed in the United States, attach a death certificate and a certification (letter) from the federal employer. Free tax software For other U. Free tax software S. Free tax software civilian employees killed overseas, attach a certification from the Department of State. Free tax software   If you do not have enough tax information to file a timely claim for refund, you can suspend the period for filing a claim by filing Form 1040X. Free tax software Attach Form 1310, any required documentation currently available, and a statement that you will file an amended claim as soon as you have the required tax information. Free tax software Joint returns. Free tax software   If a joint return was filed, only the decedent's part of the income tax liability is eligible for forgiveness. Free tax software Determine the decedent's tax liability as follows. Free tax software Figure the income tax for which the decedent would have been liable if a separate return had been filed. Free tax software Figure the income tax for which the spouse would have been liable if a separate return had been filed. Free tax software Multiply the joint tax liability by a fraction. Free tax software The numerator of the fraction is the amount in (1), above. Free tax software The denominator of the fraction is the total of (1) and (2). Free tax software   The resulting amount from (3) above is the decedent's tax liability eligible for forgiveness. Free tax software Filing Reminders To minimize the time needed to process the decedent's final return and issue any refund, be sure to follow these procedures. Free tax software Write “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Free tax software If a personal representative has been appointed, the personal representative must sign the return. Free tax software If it is a joint return, the surviving spouse must also sign it. Free tax software If you are the decedent's spouse filing a joint return with the decedent and no personal representative has been appointed, write “Filing as surviving spouse” in the area where you sign the return. Free tax software If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Free tax software ” To claim a refund for the decedent, do the following. Free tax software If you are the decedent's spouse filing a joint return with the decedent, file only the tax return to claim the refund. Free tax software If you are the personal representative and the return is not a joint return filed with the decedent's surviving spouse, file the return and attach a copy of the certificate that shows your appointment by the court. Free tax software (A power of attorney or a copy of the decedent's will is not acceptable evidence of your appointment as the personal representative. Free tax software ) If you are filing an amended return, attach Form 1310 and a copy of the certificate of appointment (or, if you have already sent the certificate of appointment to IRS, write “Certificate Previously Filed” at the bottom of Form 1310). Free tax software If you are not filing a joint return as the surviving spouse and a personal representative has not been appointed, file the return and attach Form 1310. Free tax software Other Tax Information Discussed below is information about the effect of an individual's death on the income tax liability of the survivors (including widows and widowers), the beneficiaries, and the estate. Free tax software Tax Benefits for Survivors Survivors can qualify for certain benefits when filing their own income tax returns. Free tax software Joint return by surviving spouse. Free tax software   A surviving spouse can file a joint return for the year of death and may qualify for special tax rates for the following 2 years, as explained under Qualifying widows and widowers, later. Free tax software Decedent as your dependent. Free tax software   If the decedent qualified as your dependent for a part of the year before death, you can claim the exemption for the dependent on your tax return, regardless of when death occurred during the year. Free tax software   If the decedent was your qualifying child, you may be able to claim the child tax credit or the earned income credit. Free tax software To determine if you qualify for the child tax credit, see the instructions for Form 1040, line 51; Form 1040A, line 33; or Form 1040NR, line 48. Free tax software To determine if you qualify for the earned income credit, see the instructions for Form 1040, lines 64a and 64b or Form 1040A, lines 38a and 38b. Free tax software Qualifying widows and widowers. Free tax software   If your spouse died within the 2 tax years preceding the year for which your return is being filed, you may be eligible to claim the filing status of qualifying widow(er) with dependent child and qualify to use the married-filing-jointly tax rates. Free tax software Requirements. Free tax software   Generally, you qualify for this special benefit if you meet all of the following requirements. Free tax software You were entitled to file a joint return with your spouse for the year of death—whether or not you actually filed jointly. Free tax software You did not remarry before the end of the current tax year. Free tax software You have a child, stepchild, or foster child who qualifies as your dependent for the tax year. Free tax software You provide more than half the cost of maintaining your home, which is the principal residence of that child for the entire year except for temporary absences. Free tax software Example. Free tax software William Burns' wife died in 2010. Free tax software William has not remarried and continued throughout 2011 and 2012 to maintain a home for himself and his dependent child. Free tax software For 2010, he was entitled to file a joint return for himself and his deceased wife. Free tax software For 2011 and 2012, he qualifies to file as a qualifying widower with dependent child. Free tax software For later years, he may qualify to file as a head of household. Free tax software Figuring your tax. Free tax software   Check the box on line 5 (Form 1040 or 1040A) under Filing Status on your tax return. Free tax software Use the Tax Rate Schedule or the column in the Tax Table for Married filing jointly, which gives you the split-income benefits. Free tax software   The last year you can file jointly with, or claim an exemption for, your deceased spouse is the year of death. Free tax software Joint return filing rules. Free tax software   If you are the surviving spouse and a personal representative is handling the estate for the decedent, you should coordinate filing your return for the year of death with this personal representative. Free tax software See Joint Return under Final Income Tax Return for Decedent—Form 1040, earlier. Free tax software Income in Respect of a Decedent All income the decedent would have received had death not occurred that was not properly includible on the final return, discussed earlier, is income in respect of a decedent. Free tax software If the decedent is a specified terrorist victim (see Specified Terrorist Victim, earlier), income received after the date of death and before the end of the decedent's tax year (determined without regard to death) is excluded from the recipient's gross income. Free tax software This exclusion does not apply to certain income. Free tax software For more information, see Publication 3920. Free tax software How To Report Income in respect of a decedent must be included in the income of one of the following. Free tax software The decedent's estate, if the estate receives it. Free tax software The beneficiary, if the right to income is passed directly to the beneficiary and the beneficiary receives it. Free tax software Any person to whom the estate properly distributes the right to receive it. Free tax software If you have to include income in respect of a decedent in your gross income and an estate tax return (Form 706) was filed for the decedent, you may be able to claim a deduction for the estate tax paid on that income. Free tax software See Estate Tax Deduction, later. Free tax software Example 1. Free tax software Frank Johnson owned and operated an apple orchard. Free tax software He used the cash method of accounting. Free tax software He sold and delivered 1,000 bushels of apples to a canning factory for $2,000, but did not receive payment before his death. Free tax software The proceeds from the sale are income in respect of a decedent. Free tax software When the estate was settled, payment had not been made and the estate transferred the right to the payment to his widow. Free tax software When Frank's widow collects the $2,000, she must include that amount in her return. Free tax software It is not reported on the final return of the decedent or on the return of the estate. Free tax software Example 2. Free tax software Assume the same facts as in Example 1, except that Frank used the accrual method of accounting. Free tax software The amount accrued from the sale of the apples would be included on his final return. Free tax software Neither the estate nor the widow would realize income in respect of a decedent when the money is later paid. Free tax software Example 3. Free tax software On February 1, George High, a cash method taxpayer, sold his tractor for $3,000, payable March 1 of the same year. Free tax software His adjusted basis in the tractor was $2,000. Free tax software George died on February 15, before receiving payment. Free tax software The gain to be reported as income in respect of a decedent is the $1,000 difference between the decedent's basis in the property and the sale proceeds. Free tax software In other words, the income in respect of a decedent is the gain the decedent would have realized had he lived. Free tax software Example 4. Free tax software Cathy O'Neil was entitled to a large salary payment at the date of her death. Free tax software The amount was to be paid in five annual installments. Free tax software The estate, after collecting two installments, distributed the right to the remaining installments to you, the beneficiary. Free tax software The payments are income in respect of a decedent. Free tax software None of the payments were includible on Cathy's final return. Free tax software The estate must include in its income the two installments it received, and you must include in your income each of the three installments as you receive them. Free tax software Example 5. Free tax software You inherited the right to receive renewal commissions on life insurance sold by your father before his death. Free tax software You inherited the right from your mother, who acquired it by bequest from your father. Free tax software Your mother died before she received all the commissions she had the right to receive, so you received the rest. Free tax software The commissions are income in respect of a decedent. Free tax software None of these commissions were includible in your father's final return. Free tax software The commissions received by your mother were included in her income. Free tax software The commissions you received are not includible in your mother's income, even on her final return. Free tax software You must include them in your income. Free tax software Character of income. Free tax software   The character of the income you receive in respect of a decedent remains the same as it would have been to the decedent if he or she were alive. Free tax software If the income would have been a capital gain to the decedent, it will be a capital gain to you. Free tax software Transfer of right to income. Free tax software   If you transfer your right to income in respect of a decedent, you must include in your income the greater of: The amount you receive for the right, or The fair market value of the right you transfer. Free tax software   If you make a gift of such a right, you must include in your income the fair market value of the right at the time of the gift. Free tax software   If the right to income from an installment obligation is transferred, the amount you must include in income is reduced by the basis of the obligation. Free tax software See Installment obligations, later. Free tax software Transfer defined. Free tax software   A transfer for this purpose includes a sale, exchange, or other disposition, the satisfaction of an installment obligation at other than face value, or the cancellation of an installment obligation. Free tax software Installment obligations. Free tax software   If the decedent sold property using the installment method and you are collecting payments on an installment obligation acquired from the decedent, use the same gross profit percentage the decedent used to figure the part of each payment that represents profit. Free tax software Include in your income the same profit the decedent would have included had death not occurred. Free tax software For more information, see Publication 537, Installment Sales. Free tax software   If you dispose of an installment obligation acquired from a decedent (other than by transfer to the obligor), the rules explained in Publication 537 for figuring gain or loss on the disposition apply to you. Free tax software Transfer to obligor. Free tax software   A transfer of a right to income, discussed earlier, has occurred if the decedent (seller) sold property using the installment method and the installment obligation was transferred to the obligor (buyer or person legally obligated to pay the installments). Free tax software A transfer also occurs if the obligation was canceled either at death or by the estate or person receiving the obligation from the decedent. Free tax software An obligation that becomes unenforceable is treated as having been canceled. Free tax software   If such a transfer occurs, the amount included in the income of the transferor (the estate or beneficiary) is the greater of the amount received or the fair market value of the installment obligation at the time of transfer, reduced by the basis of the obligation. Free tax software The basis of the obligation is the decedent's basis, adjusted for all installment payments received after the decedent's death and before the transfer. Free tax software   If the decedent and obligor were related persons, the fair market value of the obligation cannot be less than its face value. Free tax software Specific Types of Income in Respect of a Decedent This section explains and provides examples of some specific types of income in respect of a decedent. Free tax software Wages. Free tax software   The entire amount of wages or other employee compensation earned by the decedent but unpaid at the time of death is income in respect of a decedent. Free tax software The income is not reduced by any amounts withheld by the employer. Free tax software If the income is $600 or more, the employer should report it in box 3 of Form 1099-MISC, Miscellaneous Income, and give the recipient a copy of the form or a similar statement. Free tax software   Wages paid as income in respect of a decedent are not subject to federal income tax withholding. Free tax software However, if paid during the calendar year of death, they are subject to withholding for social security and Medicare taxes. Free tax software These taxes should be included on the decedent's Form W-2 along with the taxes withheld before death. Free tax software These wages are not included in box 1 of Form W-2. Free tax software   Wages paid as income in respect of a decedent after the year of death generally are not subject to withholding for any federal taxe