State Death Taxes. State laws vary, but generally any estate which pays a federal estate tax must also file a state estate or death tax form and pay the state death tax. This amount is paid by the estate to the state in which the deceased lived. State Inheritance Taxes. Again, state requirements vary.
Some states charge no inheritance tax and others levy one percent or more.
Federal and State Income Taxes. The federal and state income taxes of the deceased are due for the year of death. The taxes are due on the normal filing date of the following year, unless an extension is requested. Professional guidance is strongly recommended in preparing the tax returns because the filing rules are quite complicated and many tax-saving opportunities might be overlooked by an unqualified prepare. If you hold any insurance policies, you may have to change beneficiaries.