One of the duties of the personal representative of an estate is to pay the estate’s debts, often referred to as “creditors” during the probate process. This includes any taxes that the decedent owes to the federal government. The personal representative will often be responsible for filing the decedent’s final income tax return, Form 1040, as well as any necessary estate income tax return, Form 1041. In Florida, there is no state level estate tax, aka death tax, as well as no inheritance tax. The vast majority of estates are well below the threshold for federal estate tax liability with the exemption being over $11 million per individual at the moment.
For most estates going through probate, the IRS will not be served with notice to creditors and will not file a claim in the proceedings. If you are uncertain regarding the decedent’s tax liability, it is prudent to obtain the last three years of the decedent’s tax returns and to file a request for a quick assessment from the IRS. If you have any particular questions about the taxation of an estate, we recommend that you contact an experienced accountant or trust an estates attorney to help guide you through the process.