How to Handle Unpaid Taxes After a Death in the Family
After you have suffered a death in the family, tax debt is one of the very last things that you want to think about. But, once some time has passed, if you are left to help sort out any outstanding financial issues left behind, it is important to understand some basic information.
1. Tax Debt:
As you might expect, unpaid tax debt remains valid even after an individual’s death. Any outstanding tax debt is generally paid out of any assets of the estate. Debts that the individual owed are paid before any assets are distributed to heirs or beneficiaries.
2. Importance of the Role of the Executor:
An executor is an individual appointed to handle the payment of the debts and distribution of assets of an estate. The executor is responsible for ensuring that all laws are followed. The IRS also requires notice of an individual’s death.If for any reason tax debts are not paid, the IRS can and will come back to the executor or beneficiaries for payment of this debt, even if the inherited funds have been spent.
3. Spouse’s Responsibility:
Generally, the IRS holds surviving spouses responsible for tax debt. The surviving spouse must also file a joint tax return for the date of debt and must pay any taxes owed for that year. If the surviving spouse is unaware of significant tax debt, they can appeal to the IRS under the “innocent spouse rule”.
4. Estate Taxes:
An estate is any property left behind by the deceased. The IRS taxes estates separately from any income taxes owed by the individual. The executor must file a separate return for the estate taxes due.
5. Support is Key:
When a family member dies and you are ready to tackle any financial and tax issues left behind, you may want to seek help from a trusted attorney, financial advisor and/or tax firm. At this difficult time, it might be easiest to trust these complicated details with someone who is not emotionally tied to the family and can therefore provide sound and unbiased advice navigating issues around the estate, tax and other debts.
Success Tax Relief: Providing Help When You Need It
An experienced tax firm can help take away the burden of worrying over how best to handle any outstanding tax debt after the death of a family member so that you can focus on other things. Success Tax Relief has worked on many estates and helped families and estate executors navigate this sometimes difficult process. Success Tax Relief focuses on putting our customers first, so you will feel taken care of during this difficult process. We can review all documents related to the deceased tax returns, estate information and make recommendations for how best to manage the tax situation. Success Tax Relief is here when you need us. Give us a call at (877) 958-6638 and speak with one of our experienced tax professionals who can begin helping you immediately. Take the worry out of this process and let us help!