Expert: John Kirk, CPA Date: 8/9/2008 Subject: File final 1041 before it is due?
Question I am the administrator for the estate of my 49 year old sister who died intestate one year ago. With all debts now paid, I had been planning to close the estate and distribute the estate's money to the beneficiary before earning more than $600 in interest income; so that I could avoid filing taxes again in early 2009. (I treated the estate as a calendar year entity and filed taxes in early 2008.) However, I just received a currently-dated check from my late sister's employer to cover a raise that was never applied during the last months she worked. Since that check alone is more than $600 and had Federal and State taxes deducted/paid, I know I'll have to file a 1041 and the matching New York State form for 2008. My question is this: Do I need to keep the estate open until I receive the W-2 form in early 2009 and then file the tax forms, or is there a way to file those forms earlier? Related question: The check was initially payable to my late sister, presumably using her Social Security Number, but was reissued "to the estate of", do I need to provide the estate's tax identification number or will the IRS and New York figure it out when I file the second, and final, fiduciary tax forms?
Answer The check should be deposited into the estate, what you have is income in respect to a decedent which is included on the 1041. Any taxes that were withheld are deductible expenses on the 1041.
You don't need to wait till next year to file, close the estate and issue a final 1041.
