Mom didn’t have much in the way of assets- no car, house, etc. She just had a brokerage account. I need advice and guidance on filing her final taxes. Are there any agencies that help with this sort of thing?
If she passed this year then you can wait till next year. Gather any statements she receives such as social security and hold on to any bank statements up to the month of her death. If it is simple, then look for those tax preparers who are free. If you know there will accountant fees then do not close out her estate until next year. Notify any accounts that she has passed so that you can get the statements for date of death. Those accounts can continue till the end. Also you should contact the brokers early to see if she assigned beneficiary. They will tell you if you need to go through probate. As an executor for 3 people, the longest one took 18 months
You'll have to file her final taxes next year, because she was alive this year. Let her brokerage account continue to earn money if you want (and if you are her executor), but make absolutely sure it doesn't earn a dime after January 1, 2024, or you'll have to file in 2025. Be sure to reserve enough to pay any taxes she will owe this year (2023) before dispersing her funds.
My mother died in July 2021, we sold the house in July 2022, and next week I am FINALLY meeting with a tax advisor to do the final taxes. I've distributed the lion's share of her estate already, but I've kept back enough to cover the taxes on her brokerage account and any capital gains taxes that might be owed from the sale of the house. What's left will be distributed after the taxes are done.
If you're talking about her taxes for 2022, consult a tax specialist. You'll need her final brokerage statements from December of last year, which you can get online if you have authority to access her account information. Be sure to bring her 2021 taxes along, too, so the tax preparer knows what her history is. Be ready to file for an extension.
I did not file my Moms last year taxes. She received 1500 a month in SS. $200 a month in pension. She had not paid taxes in years because her income was mostly SS and within the cap allowed. You are allowed a certain amount of income over SS. If Moms investments interest, or dividends (anything generating a 1099) stays within that amt, she may not have to file. A tax CPA should be able to determine that. I was told the amt of money my Mom would receive would probably just offset the cost of the CPA doing the filing.
The Executor of the estate is responsible for the tax filings. If there is no will, no executor, and this estate with its brokerage account is in limbo then the next of kin most able to serve as "Administrator" (an executor in the absence of a will) will handle the brokerage account and the estate and the final taxes, both estate and personal.
If you are family and are aware of where former tax filings and papers are they will be turned over to the administrator of the estate.
You seem to feel YOU are responsible. So I would see an elder law attorney now to have answered any questions about wills, taxes, executors, and distribution after final bill paying. I wish you the best of luck.
Let this discussion serve as an alert to those of us whose heirs will need help with filing our taxes! Start a folder where you put copies of your last few IRS returns. Make a list of where you get your tax documents - online? In the mail? By email? Include passwords.
If you use a professional tax preparer, include information about that and list their phone, fax number and email address. Keep this folder with your other information that someone will need to know upon your death or disability. Your POA and/or executor will be grateful.
This is what I've done. I have copies on my computer and in a physical file.
I would never want my children to go through what I went through after the deaths of my parents. They left a total mess of their business and personal affairs. Nightmare.
Rmwolfe, welcome to the forum. So sorry for the passing of your Mom.
Ah, income taxes. When my last parent had passed and there was a brokerage account, I found it was just easier to go to a CPA or a tax preparer. They are up-to-date with the ever changing of Federal and State tax laws. To me, it was worth the cost of using an expert.
And if there is probate, it could take months if not years to finish probate. I had to file Dad's income taxes for two years as probate took that long due to the County backlog of cases.... [sigh].
AARP has a volunteer tax aide program that will help you file for free, but since it's very close to the end of tax season most slots may be filled by now. Search on https://www.aarp.org/money/taxes/aarp_taxaide/ by zip code to find a program near you. Had mom's tax return for 2022 been filed yet? If not, it should be filed now. If you are executor, there's a process for filing on behalf of a deceased person; you do need to bring the death certificate and any documents indicating that you are are executor or personal representative. You can't actually file final tax returns for your mom yet. You would have to wait for filing the 2023 taxes until you're sure all the forms have been received (e.g., 1099s for interest and dividends). I'm not sure, but this may will likely have to wait until 2024 because normally brokerages and banks don't send the 1099s for income received in one year until at least February of the following year. Here's some information from the IRS: https://www.irs.gov/individuals/file-the-final-income-tax-returns-of-a-deceased-person
So sorry for the loss of your mother. I would file for an extension to give you time to deal with the taxes. You are still grieving her loss ~ the taxes can wait.
Note, if one is filing for an extension, one still needs to pay an "estimate tax", before the deadline, unless they know for sure there will be a refund. Otherwise, the IRS will charge a late fee.
Also you should contact the brokers early to see if she assigned beneficiary. They will tell you if you need to go through probate.
As an executor for 3 people, the longest one took 18 months
My mother died in July 2021, we sold the house in July 2022, and next week I am FINALLY meeting with a tax advisor to do the final taxes. I've distributed the lion's share of her estate already, but I've kept back enough to cover the taxes on her brokerage account and any capital gains taxes that might be owed from the sale of the house. What's left will be distributed after the taxes are done.
If you're talking about her taxes for 2022, consult a tax specialist. You'll need her final brokerage statements from December of last year, which you can get online if you have authority to access her account information. Be sure to bring her 2021 taxes along, too, so the tax preparer knows what her history is. Be ready to file for an extension.
If there is no will, no executor, and this estate with its brokerage account is in limbo then the next of kin most able to serve as "Administrator" (an executor in the absence of a will) will handle the brokerage account and the estate and the final taxes, both estate and personal.
If you are family and are aware of where former tax filings and papers are they will be turned over to the administrator of the estate.
You seem to feel YOU are responsible. So I would see an elder law attorney now to have answered any questions about wills, taxes, executors, and distribution after final bill paying. I wish you the best of luck.
If you use a professional tax preparer, include information about that and list their phone, fax number and email address. Keep this folder with your other information that someone will need to know upon your death or disability. Your POA and/or executor will be grateful.
This is what I've done. I have copies on my computer and in a physical file.
I would never want my children to go through what I went through after the deaths of my parents. They left a total mess of their business and personal affairs. Nightmare.
Ah, income taxes. When my last parent had passed and there was a brokerage account, I found it was just easier to go to a CPA or a tax preparer. They are up-to-date with the ever changing of Federal and State tax laws. To me, it was worth the cost of using an expert.
And if there is probate, it could take months if not years to finish probate. I had to file Dad's income taxes for two years as probate took that long due to the County backlog of cases.... [sigh].
I'm an AARP tax aide volunteer so am familiar with that program, but there are other free programs as well, e.g., VITA. https://www.irs.gov/individuals/free-tax-return-preparation-for-qualifying-taxpayers