Trying to figure out whether I need to file a 1041
Hi all…I'm the administrator of my MIL's estate, and we're trying to determine whether we need to file a 1041.
She was employed at the time of her death, and she died in 2015 three days before she received her final paycheck in the mail (for work performed before her death). I've since filed her 2015 taxes, and her W-2 (and, by extension, 1040) included this final paycheck.
As I understand it, we won't need to file a 2016 1041 for her estate if it doesn't receive more than a $600 exemption. The paycheck was for about $1,100, and is the only income received after her death.
Can I leave things as they are, with the final paycheck accounted for in her 2015 1040 (which means we don't need to file a 1041) or do I need to go back and revise the 1040 to remove the final paycheck, and subsequently file a 1041 with the final paycheck instead?
Thanks…any advice is appreciated, and happy holidays.
Posted Dec 24, 2017, 11:11 PM UTC
What? No no no you’re supposed to include the W-2 on the final 1040 exactly like you did. Really you only see 1041s for estates when the deceased owns investment assets that sell/pay dividends after death. As long as she didn’t have anything like that, there’s nothing you need to do.
Great, that makes a lot of sense. Our lawyer generally handles much larger estates, so I think she was suspicious when I reasoned that we could skip the 1041. Meanwhile, there's just enough ambiguity in the guidelines (e.g. what "income received after death" really means) to encourage investigation. I'll sleep better tonight, thanks.