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Filing Deadlines
Trust, Estate, Gift and Decedent Income Tax: April 15, 2025
Estate Tax Return: 9 months after the date of death
When a person dies, a final 1040 income tax return for income received by the decedent before the date of death must be filed. If the decedent was married, the surviving spouse can file a joint tax return. Otherwise, the decedent's executor must prepare this return. All the same rules apply as if they were alive.
Income received by a decedent's estate after the date of death must be reported on a fiduciary income tax return. A decedent's spouse cannot claim that income on their joint tax return. Special rules apply to income, deductions, adjustments, and tax rates.
Most revocable trusts do not need to file an income tax return as the income passes through to the grantor during the grantor's life. However, once the grantor dies, the trust becomes irrevocable and must file a fiduciary income tax return. It's important to get professional help in applying for a trust EIN and filing a trust tax return as different rules apply for different types of irrevocable trusts.
This tax applies to people who own more than $13 million in assets at death. It includes real estate, retirement accounts, businesses, personal belongings, promissory notes, life insurance policies, and more. If the person made tax-deferred gifts during life, they may have to pay an estate tax even if the own less than $13 million at death.
This tax is paid by the estate, not the beneficiaries. However, if the estate distributes assets before paying the tax, the IRS can go after the beneficiaries.
Minnesota taxes much smaller estates. Any person who owned $3 million at death must file and pay estate tax. To prepare a Minnesota estate tax return, the executor of the estate must also prepare a federal tax return even if no tax is due.
There are various rules that may exclude certain assets from tax, so it's important to speak with a professional in determining if an estate tax return must be filed.
Surprise surprise, gifts are taxed as well. Unlike income, the giver, not the receiver, must file a tax return and pay the tax. Some gifts are excluded from tax. Spouses can transfer any amount of gifts between each other tax free. Anyone can gift up to $18,000 total (not per gift) per person per year. These gifts do not need to be reported to the IRS.
Any gifts over $18,000 for the year must be reported. You can choose to either pay the tax or defer the tax for when you die. When you defer the tax, it lowers the threshold for your estate to be subject to estate tax. For example, if you defer $2 million in taxable gifts, then at your death, your estate will be taxable if you own $11 million, not $13 million.
First, speak with a probate or trust administration attorney. If you haven't hired one, consider our partner NeoEra Legal. Once you're ready for taxes, complete the next four steps.
In addition to tax documents, depending on the tax return type, you will need a copy of the will, death certificate, and trust.
Only the executor or trustee specified in a will / trust or appointed by a court may prepare and sign the tax returns. Verify that it's you.
Your best bet is to get professional appraisal of all assets to avoid adjustments by the IRS even if you are not filing an estate tax return where proof of value is required.
In some cases, it is advisable to distribute assets prior to the end of the year. Sometimes, it's required. Other times, it's not allowed. The decision is critical. Speak to an attorney and a tax advisor.
Bring your documents to our office or submit them electronically. Our tax team will review all of the documents and will determine what tax returns need to be filed and what additional information is required.
For most customers, you can then relax while our team prepares the tax returns. However, if date of death values are missing and are required, you may need to find that information or you can hire us to do that as well.
Once done, we'll set up a meeting to explain your tax return so you understand it before signing. This can be a virtual or an in-person meeting. Whatever works best for you! Then sign, pay, and we'll file.
