When a person dies, the personal representative is responsible for filing certain tax returns for the decedent, and the decedent's estate. The filing requirements that apply to individuals will determine if a final income tax return is required for the decedent. Whether income must be included or deductions may be taken on the final return is determined by the method of accounting used by the decedent.
Most individuals use the cash method.
Under this method, the final return should show only the items of income that the decedent actually received, or had an unqualified right to receive, before death. Only the expenses the decedent paid before death should be deducted. The complexity of the decedent's reportable income will determine which individual return form to file. If a personal representative has been appointed, that person must sign the return. If it is a joint return, the surviving spouse also must sign it as well.