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The ins and outs of estate taxes

On Behalf of | Apr 12, 2022 | Blog, Estate Administration & Probate |

As the executor of the estate, you are typically responsible for filing the taxes. As you begin this process, you could have many questions about the fine details.

The Internal Revenue Service says that you have to file estate taxes if your loved one’s estate exceded a certain amount. In 2022, this amount was $12,060,000. You usually have nine months to submit the relevant paperwork. This means that your filing date may fall outside of the usual tax season. If you are unable to meet this deadline, the IRS could grant you an extension. This would allow you to have an additional six months to file the paperwork. However, you still may need to pay the tax by the deadline.

How do officials determine the size of the estate?

The IRS generally considers the gross estate when deciding who needs to pay estate taxes. The administration bases this on the total value of the deceased’s possessions, including the following assets:

  • Insurance
  • Real estate
  • Annuities
  • Cash
  • Business interests

Certain assets are typically excluded from the gross estate. If your loved one received lifetime gifts, for example, you do not need to include these when you determine the value of the estate.

Are there eligible deductions?

You may be able to pay less estate tax if you make certain deductions. Your loved one could have left money to charity in the will. You can usually deduct these gifts on the tax forms. Any property that a surviving spouse receives also qualifies. Additionally, there may be several expenses associated with overseeing the estate. You can generally list these as deductions.

The IRS typically requires you to submit extensive documentation about the deceased. This could include copies of the will and the death certificate. You may want to obtain several copies of important documents so that you can send them to the relevant officials.

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