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Doing my mother’s last tax return is the hardest financial task I’ve ever had

Filing a final 1040 is the culmination of a long, difficult run of financial caregiving. The official Internal Revenue Service instruction book for survivors, executors and administrators filing returns for deceased individuals in 2023 is 51 pages long, and that would seem to be sufficiently detailed and definitive. Yet, it hasn’t helped with most of the stumbling blocks I’ve faced in settling my mom’s affairs with the IRS. 

As it has been with much of my journey in handling my mother’s finances when she got sick and after she died in July, my real-life questions aren’t answered in most rulebooks and guides. Even if the information I need is there, it’s technical jargon that’s not written in a way I can understand — or in a way that’s easy to apply to my situation. 

And I’m not alone. Dana Chitwood, a retired financial counselor from Peachtree City, Ga., spoke to me after a frustrating afternoon trying to figure out if she even needed to file final 1040s for her 92-year-old parents, who passed away on the same day in February 2023. Over the years, as they got sicker, Chitwood had simplified their financial life, so when they died, they had only received one Social Security payment each and a little interest income for the year. 

“I have a master’s degree in financial counseling and I’ve taken graduate-level courses in income tax, and this was intimidating to me. I’m sitting here about to cry,” says Chitwood. “I’ve spent the last couple of hours researching, and I should have been able to get a clear answer, but one accountant says one thing and another says something different, and the wording of the instructions isn’t clear.”

Owen Arnoff, an enrolled agent and registered investment adviser based in Yuba City, Calif., says in Chitwood’s particular circumstance, the way to figure out if you need to file is to calculate the amount of income received up to the date of death — and split it in half for two people. The income threshold for a person over 65 for filing would be $15,350 — the standard deduction for 2023 for that age group — but there might be other circumstances that would cause you to want to file, like state tax requirements or to get a refund. It’s not exactly intuitive.

Gather your paperwork If you do embark on filing a last tax return for somebody, the first thing you’re going to need is a lot of paperwork that is not your own and can be hard to come by. That’s something you need to consider as you go through the early steps of settling the affairs of somebody who dies, because you might lose track of things by the time it comes time to file their tax return. 

That’s where I ran into my first set of problems. I needed end-of-year statements for my mom’s income and expenses, but I had already closed out the bank accounts, sold her condo and stopped her pension. A few months had gone by and I forgot some of the details. Would the 1099s find me from her forwarded mail? How would I compute her copious medical expenses from those months to take them as a deduction? The IRS isn’t any help on that score. 

“It’s an extremely burdensome situation,” says Ashley Francis, a certified public accountant in Washington state specializing in trust and estate-tax issues. She suggests touching base with the financial institutions involved and ensuring they have the correct address for statements. If all else fails, you can access income and wage statements by getting an account at the IRS and pulling the person’s transcript. As an executor, you have to fill out form 4506-T, Francis says, and probably file for an extension to have extra time to sort it all out. 

Miraculously, most of what I needed made it to me by the end of February, but not without some elbow grease. The hardest to get was my mother’s 1098 mortgage-interest statement, which the mortgage company said it couldn’t release to me with the trust documents they already had on file for the sale, so I had to file probate documents. It was a bizarre loop. 

The most cumbersome math was to add up her medical expenses to see if they totaled more than 7.5% of her adjusted gross income. I gave up after a while because it wasn’t worth my time to cull through credit-card statements and checkbooks. Taking the standard deduction is a lot easier — and not having a refund is actually easier than trying to claim one for a deceased person. I am still trying to wrangle my mother’s refund from 2022, which got stalled because she passed away in the middle of her late-filed return being processed.