Filing Taxes for the Deceased in San Mateo

You’re probably familiar with the saying, “Nothing is certain but death and taxes.” But even the deceased can’t escape taxes. If you have a loved one who earned taxable income in the same year he or she passed away, taxes may be owed. The same is true with respect to the deceased person’s trust or estate itself, which may generate its own tax liability. In California, the responsibility for filing taxes for a deceased person may fall to a trustee, or to the executor or personal representative of the estate. 

Handling income and estate taxes for someone who has died is an important step that must be taken care of before assets can be distributed to heirs or beneficiaries. Let an experienced California estate attorney help ensure that you are fulfilling all of your fiduciary obligations. Turn to Loew Law Group.

Why Do Taxes Have To Be Paid First?

As noted above, federal and state taxes generally have to be paid before any assets from the trust or estate can be distributed to heirs and beneficiaries. In essence, the government wants what is due to them before anyone else. A trustee, executor, or another personal representative of an estate is generally not liable for paying the taxes of the deceased from his or her personal funds.  But that person can be held liable if assets are distributed before taxes are paid, leaving insufficient assets in the trust or estate. In other words, if assets are distributed first and a taxing authority assesses a tax deficiency, the trustee or personal representative may become responsible.

Filing Taxes for Someone Who Is Deceased

Income taxes might not be the end of a trust or estate’s tax liabilities. For very large estates, a federal estate tax may also be owed.   For most estates, this may not be a problem because the value of the estate must be very significant. The exact value is adjusted annually for inflation, but for the year 2020, it was $11.58 million for an individual, and twice that amount for a married couple. A trust or estate valued at less than those amounts may not be subject to estate tax.  However, the trustee or personal representative should still consult with an attorney to determine if there are any additional benefits to filing an estate tax return.

Other Taxes That May Be Due

Depending on the nature of the trust or estate, and the activities of the deceased prior to death, additional state or federal taxes may have to be paid. Some examples are:

  • Real estate taxes owed to the state of California
  • Sales taxes if the deceased owned a business
  • Gift taxes if the deceased made monetary gifts prior to his or her death
  • Taxes on real property owed to other states or countries

How Loew Law Group Can Help

Taxes are complicated, and on top of that, there are both state and federal tax authorities who want their share. A trustee, executor or other personal representative will want these taxes taken care of before assets are distributed, and not just because of the personal liability that could result from failing to do so. Taxes are a headache, and they’re the last thing that anyone wants to deal with after the passing of a loved one. Getting them out of the way as quickly – and accurately – as possible is a top priority.

That’s why you need the experience of a dedicated probate, trust, and estate planning attorney. Loew Law Group works closely with CPAs and other tax professionals to ensure that our clients timely fulfill their tax and other accounting obligations.  Let our team go to work for your family so you can have the peace of mind you deserve.

Call Loew Law Group today to get started and to schedule your confidential consultation.