Every year, thousands of families not only deal with the death of a loved one, but also with all the accompanying paperwork — including final tax returns.
But small mistakes like missing forms or incorrect signatures call stall refunds for months. And for grieving families, this can create unnecessary financial strain at a time when they’re already under profound emotional strain.
Anne Tergesen, a reporter with the Wall Street Journal, recently shared her experience of trying to settle her late father’s estate. It’s all wrapped up except for his 2023 tax refund of $686, which is preventing her from settling his estate. At the time of writing the story, it had been 19 months since she’d filed the return (1).
“Such delays are common for people sorting the estates of loved ones,” she wrote. But there are a few ways you can reduce tax-related delays.
From January 2021 through July 2024, the IRS processed 609,953 manual refunds for deceased taxpayers. It took an average of 444 calendar days to process and issue these refunds, according to a report (2) by the U.S. Treasury Inspector General for Tax Administration (TIGTA).
In 440,443 cases where a refund was due, 43% of these were outstanding for one to two years and 9% were outstanding for more than two years (2). For comparison’s sake, electronically filed Form 1040 returns are generally processed within 21 days, according to the IRS (3).
One of the bottlenecks Tergesen said she experienced, and a common one for other filers, was the processing of the Form 1310 Statement of Person Claiming Refund Due a Deceased Taxpayer.
You’re required to file a Form 1310 unless you’re a surviving spouse filing an original or amended joint return with the decedent or you’re a personal representative filing an original Form 1040, 1040-SR, 1040-NR or 1040-SS for the decedent (which has the court certificate showing your appointment attached).
Previously, these forms had to be filed in paper format, which required manual processing — and was a major reason for processing delays. For instance, if an IRS employee requested a Form 1310, the taxpayer’s response would take three weeks, on average, to be routed to the employee once it was received by the IRS, according to the TIGTA report.
The IRS has been attempting to address these delays, and Form 1310 can now be filed electronically when attached to a Form 1040, 1040-SR, 1040-NR or 1040-SS.
Still, to ensure you benefit from this more streamlined process, make sure your electronic filing is filled out properly and submitted as an attachment at the same time you file the tax return. If you file Form 1310 separately, you’ll still have to mail it in.
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You can check the progress of your refund at www.irs.gov If it’s delayed, Tergesen was told by Phyllis Jo Kubey, a tax specialist who represents taxpayers before the IRS, to ask if there’s anything that can be done to expedite the return. That’s code, she said, for “please nudge the person handling my case.”
To ensure faster processing of a final tax return, be sure to send all required information to the IRS and that all forms are filled out properly (4). This means:
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A court-appointed representative must attach a copy of the court document showing their appointment.
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A representative who isn’t court appointed must include a Form 1310 if they’re claiming a refund.
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Payment must be submitted if tax is due.
You may not have any control over the IRS, but you can make life easier for your loved ones — while you’re still alive — by preparing your paperwork ahead of time (so they don’t have to request it from financial institutions).
“Today, many tax forms are accessed online, making it difficult to know what information exists and how to access it,” Colleen Carcone, director of wealth planning strategies at TIAA Financial Services, told USA Today (5). Make sure your spouse or representative can easily find the necessary information to complete your tax return after death.
Also, provide them with a list of your accounts and instructions on how to access those accounts. It could be worth consolidating accounts where possible as it can result in less complicated filings and make “managing your assets easier, too,” Carcone noted. Include a list of important contacts, such as your lawyer, accountant and financial advisor.
Taxes are the last thing anyone wants to deal with when a loved one dies, but they’re a necessary reality. Preparing ahead of time and ensuring forms are submitted properly can go a long way in easing the burden.
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Wall Street Journal (1); U.S. Treasury Inspector General for Tax Administration (2); IRS (3), (4); USA Today (5)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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