When a loved one passes away or becomes incapacitated, the last thing that you want to think about is paying taxes or dealing with the IRS. Unfortunately, many difficult and complicated tax issues can arise when these type of life situations occur.
It’s an absolute necessity that you retain the services of an experienced and qualified accountant who can guide you through the process and make sure that there are no unexpected tax issues along the way.
In most cases, when an individual passes away, their final tax return with the IRS must be filed. For example, if someone passed away in June and had earned income prior in the year, this income must be reported to the IRS. Sometimes this can result in a refund which belongs to beneficiaries. Other times, unfortunately, there is tax that needs to be paid to the government. The failure to pay these taxes can bring many unwanted consequences.
For instance, we still have an estate tax in the United States. However, due to recent tax law changes, the majority of Americans who pass away will not owe estate tax. Other tax issues can arise during the process of selling and distributing the assets of the estate.
Sometimes, the estate itself must file a tax return called a 1041 return. Whether you have to file this return depends on the amount of income earned by the estate and the length of time that the estate is open.
If you are appointed as guardian for a loved one or close friend, then every year the law requires that an annual accounting be filed with the Court. In addition, there are strict laws which govern this accounting process and they must be adhered to. Depending on the nature of the assets which comprise a guardianship, an accountant may be required to complete the annual accounting.
Helping Hands of Central Florida can help you with these financial details by aligning you with a trusted certified accountant who specializes in these types of financial situations.