14 Jun Filing taxes after someone dies

Q. My cousin died this year and I’m her executor. She didn’t have any income in 2017 and she has no real assets. Will I need to file an income tax return for her, and do I have to file an estate tax return?
— Executor

A. We’re sorry to hear about your cousin’s death.

Based on the numbers you provide, it seems you won’t have to file either return, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Eatontown.

“A single taxpayer for 2016 would have needed to have gross income of $10,350 to file a federal income tax return if under age 65 or gross income of at least $11,900 if 65 or older in order to have been required to file a Form 1040,” he said. “These amounts will likely increase slightly for 2017 for inflation.”

For New Jersey, Becourtney said, a single taxpayer needs to have gross income of $10,000 in order to be required to file a Form NJ-1040.

“If your cousin made any estimated tax payments for 2017 prior to death including any 2016 overpayments applied towards 2017 estimated taxes, then a 2017 income tax return would need to be filed in order to request refunds to be issued,” he said. “Regardless of the date of death, the due date remains April 15 of the following year.”

Becourtney said a decedent with next to no assets has no estate tax filing requirement.

He said only a small segment of the population ends up having to file any estate tax returns.

For 2017, a federal estate tax return would be required if assets totaled $5.49 million and a New Jersey estate tax return would be required if assets totaled $2 million.

“The New Jersey estate tax will no longer apply to decedents on or after Jan. 1, 2018,” he said. “President Trump has indicated that he is in favor of repealing the federal estate tax, which is often referred to in Washington as the `death tax,’ and this is included in his tax reform plan.”

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This post was first published in June 2017.