Executor, Administrator, Personal Representative or Trustee -- Checklist of Forms & Due Dates to be Filed for Decedent, Estate and/or Trust

Executor, Administrator, 
Personal Representative or Trustee
---------------------------------

Checklist of Forms & Due Dates 
to be Filed for Decedent, 
Estate and/or Trust

IRS  Form No.	Title	Due Date
GENERAL
SS-4	Application for Employer Identification Number. EIN# may be requested via telephone, US Mail or visit Application for Employer Identification Number	As soon as possible. The identification # must be included in returns, statements and other documents
56	Notice Concerning Fiduciary Relationship	As soon as all necessary information is available.
4571	Explanation for Filing Return Late or Paying Tax Late	Files with any tax return (1040, 1041, 706, etc.) that is not timely filed and/or tax paid timely.
8822	Change of Address	As soon as the address is changed.
INCOME TAX
1040	US Individual Tax Return (to report income of decedent from January 01st through data of death (DOD).	April 15th of the year after death for calendar year.
1040-R	US Non-resident Alien Income Tax Return	15th day of 6th month after end of tax year.
1041	US Fiduciary Income Tax Return, (to report income from day after death until close of estate).	15th day of 4th month after end of estate's tax year; fiscal years elective by estate.
1041-A	US Information Return- Trust Accumulation of Charitable Amounts.	15th day of 4th month after end of tax year.
1041-T	Allocation of Estimated Tax Payments to Beneficiaries	Trust - by March 05th. Estate - upon termination.
1041-ES	Estimated Tax for Fiduciaries	Generally, April 15th, June 15th, Sept 15th and January 15th for calendar year filers; modify for fiscal year.
1310	Statement of Person Claiming Refund Due a Deceased Taxpayer	To be filed with Form 1040 or Form 1040-NR if refund is due. If the person claiming the refund is a surviving spouse filing a joint return with the decedent or a personal representative, this form is not required.
2688 obsolete no longer required	Application for Additional Extension of Time to file US Individual Income Tax Return to filed by August 15th. (obsolete, no longer required)	If Form 4868 is filed by April 15th, automatic 6-month extension is effective.(See Form 4868 below).
2758	Application for Extension of Time to File Certain Excise, Income, Information and Other Returns.	Sufficiently early to permit IRS to consider the application and reply before the due date of Form 1041- Estate.
4810	Request for Prompt Assessment Under IRC §6501(d)	As soon as possible after filing Form 1040 or Form 1041.
4868	Application for Automatic Extension of Time (6-months until October 15th) to File US Individual Income Tax Return.	By April 15th (for calendar year filer).
8656	Alternate Minimum Tax - Fiduciaries 1041 (being added to Form 1041 for 1992 as two additional pages).	To be filed with Form 1041. Form is used by fiduciary to compute an income distribution deduction on a minimum tax basis, alternative minimum taxable income, and alternative minimum tax.
8736	Application for Automatic Extension of Time to File Return for a US Partnership, REMIC or for Certain Trusts	By due date of Form 1041-Trust; gives automatic three-month extension to file (but not to pay).
8800	Application for Additional Extension of Time to File Return for a US Partnership, REMIC or for Certain Trusts	File in adequate time to permit the Internal Revenue Service to consider the application and apply before the return's regular or extended due date.
ESTATE TAX
706	United States Estate (and Generation-Skipping Transfer) Tax Return	9-months after decedent's date of death (DOD).
706-A	United States Additional Estate Tax Return	6-months after cessation or disposition of special-use valuation property.
706-CE	Certification of Payment of Foreign Death Tax	9-months after decedent's death. To be filed with Form 706.
706-GS (D)	Generation-Skipping Transfer Tax Return for Distributions	See form instructions
706-GS (D-1)	Notification of Distribution from a Generation-Skipping Trust	See form instructions
706-GS (T)	Generation-Skipping Transfer Tax Return for Terminations	See form instructions
706-NA	United States Estate (and Generation-Skipping Transfer) Tax Return, Estate of Non-resident Not a Citizen of the United States.	9-months after decedent's date of death (DOD).
712	Life Insurance Statement	Part I to be filed with federal estate tax return.
4768	Application for Extension of Time to file US Estate (and  Generation-Skipping Transfer) Tax Return and/or Pay Estate (and Generation-Skipping Transfer) Taxes.	Sufficiently early to permit IRS to consider the application and reply before the estate tax due date.
OTHER
1042	Annual Withholding Tax Return for US Source Income of Foreign Persons	April 15th
1042-S	Foreign Person's US Source Income Subject to Withholding	April 15th
8300	Report of Cash Payment over $10,000 Received in trade or business.	15th day after the date of the transaction.
GIFT TAX
709	United States Gift (and Generation- Skipping Transfer) Tax Return	Form 709 is an annual return. Calendar-year filers should file Form 709 on or after January 01st but not later than April 15th of the year following the calendar year when the gifts were made, unless extended. If the donor of the gifts died during the year in which the gifts were made, the executor must file the donor's Form 709 not later than the earlier of: (1) the due date (with extensions) for filing the donor's estate tax return; or (2) April 15th of the year following the calendar year when the gifts were made.  If no estate tax return is required to be filed, the due date for Form 709 (without extensions) is April 15th. Any extension of time granted to file you calendar year income tax return will also extend the time to file Form 709. Income tax extensions are made using Form 4868. If you received an extension, attach a copy of it to Form 709.
709-A	United States Short Form Gift Tax Return	Form 709-A is a calendar year return to be filed on or after January 01st but not later than April 15th of the calendar year following the year when the non-taxable split gifts were made. Any extension of time granted to file your calendar year income tax return will also extend the time to file Form 709-A. Income tax extensions are made using Form 4868. If you received an extension, attach a copy of it to Form 709-A.
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Patient Protection & Affordable Care Act

Patient Protection & Affordable Care Act
Courtesy:  William Perez, your Guide to Taxes
This week I take a closer look at four tax provisions from the Affordable Care Act, which was recently upheld as constitutional by the Supreme Court.

Expansion of the Medicare Tax
Investors may have heard that an additional Medicare tax of 3.8% will be imposed investment income such as interest, dividends, and capital gains. While that's true, some further details are worth bearing in mind. The additional Medicare tax will apply to income over $200,000 for unmarried persons ($250,000 for married persons). And the tax will apply to a base of income that is the lower of net investment income or adjusted gross income. This "lower of" feature in the Medicare surtax creates opportunities for people to design their financial affairs to keep the new tax as low as possible.
See More About: medicare taxes

Reduction in Flexible Spending Accounts
Currently, employees can set aside up to $5,000 in a healthcare flexible spending account. Starting in 2013, that amount will drop to $2,500 per year. This will make flexible spending accounts less of a tax shelter, but could also reduce the amount of FSA funds that are forfeited under the "use it or lose it" rules. Robert DiMase (About Human Resources) has more information about FSA benefits.
See More About: flexible spending accounts standard employee benefits employee retention

Medical Deduction Threshold to Rise to 10%
Currently, people can deduct medical, dental and similar health care expenses as an itemized deduction, but only to the extent that the medical expenses exceed 7.5% of adjusted gross income. Starting in 2013, this threshold will be 10%. This will result in even fewer people being able to write off their medical expenses.
See More About: itemized tax deductions medical expenses

Small Business Tax Credit for Health Insurance Coverage
Employers with fewer than 25 employees may be eligible for a federal tax credit worth 35% of the cost of health insurance offered to non-owner employees. This particular provision of the Affordable Care Act is already in effect (since 2010), and will become more valuable in 2014 when the credit increases to 50% of health insurance premiums.
See More About: business tax planning health insurance tax credits

Simplified Summary of Federal Estate Tax Laws

 
Image courtesy WikiPaintings 
The Wisdom of Solomon, James Tissot
Simplified Summary of Federal Estate Tax Laws

FILING REQUIREMENTS	FEDERAL
Size of gross estate	$5,120,000 (Year 2012)
	Estates totaling less are exempt from the federal estate tax.
Forms to be filed and due date.	Form 706 (United States Estate and Generation-Skipping Transfer Tax Return) within 9-months after date of death (DOD).
Extension of filing date(s) available	Yes, upon timely application. Does not extend time for payment; interest charged until paid.
	Two six-month extensions generally available.  Only one six-month payment extension available.
PROPERTY INCLUDIBLE IN GROSS ESTATE
Real Estate	At gross fair market value (FMV) of "Highest and best use" at DOD (or alternative valuation date).
Stocks & Bonds	Valued at mean between high and low on date of death (traded securities) or if not available, fair market value.
Mortgages, Notes, Cash	FMV
Miscellaneous Property, such as business interests, antiques, growing crops, vehicles, equipment, personal effects, refunds, etc.	FMV
Life Insurance on Decedent	100% of proceeds, if incidents of ownership held by decedent, irregardless of beneficiary.
Jointly-Owned Property	50% of FMV at DOD into estate of first co-owner to die where owned by spouses as qualifying joint interest property.
	100% of FMV at DOD into estate of first non-spousal co-owner to die except to extent executor can prove contribution to purchase by surviving joint tenant.
Transfers During Decedent's Lifetime	Those transfers which were an unconditional gift of property with a value in excess of $13,000 (Year 2012) and where life right to use or income is retained by donor; includes revocable transfers.
Powers of Appointment	At FMV at DOD if possess power of appointment.
Annuities	Amount of survivor interest valued actuarially.  If from an IRA, Keogh, 401(k), 403(b) or qualified pension/profit-sharing plan; yes, subject to a transition rule (prior to 1983, such amount were fully excludable from estate).
SPECIAL USE VALUATION FOR FARMS AND CLOSELY-HELD BUSINESSES	If specific qualifying conditions are met, real property used on a farm or as woodlands or in a closely-held business may be valued on the basis of its "current" use rather than on the basis of "highest and best use."  Tax benefits realized by the estate must be recaptured if the property passes out of the family or ceases to be used as before within 10 years of the decedent's death.  This procedure is complicated and has a number of possible problems.  This method cannot be used to reduce the value of a federal estate by more than $750,000.
DEDUCTIONS
Funeral Expenses	Yes
Administration Expenses--attorney, executor, appraisal and auctioneer fees, etc.	Yes; may be taken as fiduciary income tax deduction in lieu of being used on estate return.
Debts of Decedent and Mortgages	Yes
Marital Deduction	100% of property left to surviving spouse; includes certain terminable interest, such as life estates, life right to receive income and trust rights, if Q-TIP (Qualified Terminable Interest Property) election made by executor.
Charitable Bequests	Yes
TAX COMPUTATION AND PAYMENT
Credits Against Tax:
Federal Unified Credit	This credit exempts $5,120,000 (Year 2012) of property from taxation; credit is reduced for any taxable lifetime gifts made after 12/31/1976.
Credit for State Death Taxes	Upwardly sliding scale
Credit for Gift Taxes	Full amount of federal gift tax paid on gifts before 1977 for gifted property included in estate.
Previously Taxed Property	Credit against federal estate tax paid on previous estates; sliding scale for up to ten-years.
Due Date	Nine months after DOD.
Extension Available	Yes, upon timely application; interest charged on unpaid tax until paid.
	A special election may be available to estates containing farm property or a closely-held business for installment payments of estate taxes over a 14-year period (interest only 4% on estate tax attributable to first one million dollars of value) for first four years, then ten equal annual payments).
Rates	For taxable estates, marginal rates range from 32% to a maximum of 55%; unified with gift tax since 01/01/1977.
Basis of Property of Heirs	FMV as shown on estate tax return.  Special rule for qualified joint interest property held with spouse--one-half of original basis plus one-half of FMV as shown on estate tax return.

Statute of Limitations for Tax Refunds, IRS Audits, and Collections 3 years to claim a refund, 3 years to be audited, and 10 years to pay tax debts

Statute of Limitations for Tax Refunds, IRS Audits, and Collections 3 years to claim a refund, 3 years to be audited, and 10 years to pay tax debts
Courtesy:  William Perez, About.com Guide 

The IRS has three years to give you a refund, three years to audit your tax return, and ten years to collect any tax due. Together, these laws are called the statute of limitations. They put time limits on various tax-related actions that you and the IRS can take.

You have 3 years to claim a tax refund.This is measured from the original deadline of the tax return, plus three years. For example, your 2010 tax return is due on April 15th, 2011. Add three years to this filing deadline, and you have until April 15th, 2014, to file your 2010 tax return and still get a tax refund. If you file your 2010 return after April 15th, 2014, then your refund "expires." It goes away forever because the statute of limitations for claiming a refund has closed.

If you already filed a tax return, you can claim any additional refunds by sending in corrections with an amended return. Amended returns claiming additional refunds must be filed with the IRS before the statute of the limitations expires three years from the original April 15th due date.

Filing an extension may extend the period for claiming refunds. Under code section 6511(b)(2)(A), the IRS can issue refunds for a particular year if you requested an extension and subsequently file a tax return within three years from the extended deadline.

The IRS has 3 years to audit your tax return or to assess any additional tax liabilities.This is measured from the day you actually filed your tax return. If you filed your taxes before the deadline, the time is measured from the April 15th deadline. We could utilize the same example as in the refund situation: the IRS has until April 15, 2014, to audit a 2010 tax return filed on or before April 15, 2011. After the three-year audit time period has expired, the IRS cannot initiate an audit of your tax return unless there is a suspicion of tax fraud. Most state tax agencies follow the federal three-year period for auditing tax returns; however some states have a longer statute of limitations.

The IRS has 10 years to collect outstanding tax liabilities.This is measured from the day a tax liability has been finalized. A tax liability can be finalized in a number of ways. It could be a balance due on a tax return, an assessment from an audit, or a proposed assessment that has become final. From that day, the IRS has ten years to collect the full amount, plus any penalties and interest. If the IRS doesn't collect the full amount in the 10-year period, then the remaining balance on the account disappears forever because the statute of limitations on collecting the tax has expired.

Example of the Refund Statute of Limitations Works in Real Life
Let's provide an example of how time limits effect federal tax refunds are based on a real-life scenario. Mr. Smith wants to file 6 years of tax returns: 2004 through 2010. In all those years he has refunds. If he files by April 15th, 2011, Mr. Smith will receive refunds for the years 2007 through 2010 as those years are still open under the 3-year time limit. Refunds from earlier years 2004, 2005, and 2006, however, have expired and the IRS won't send him a refund check.

When a refund has expired, that refund money disappears forever. In IRS terminology, an expired refund is considered an "excess collection". That refund money cannot be sent to the taxpayer as a check. Nor can the refund money be applied as a payment towards another tax year for which a person might still owe the government. Nor can be refund be applied to another year as an estimated payment.

Using Time Limits to Plan Your TaxesIt is in your best interest to file your tax returns at your earliest possible convenience. First, you can claim refunds. Second, it starts the clock ticking on the 3-year statute for audits and the 10-year statue for collections.

There's some unique planning opportunities as well if there are multiple tax years involved, as refunds that are still allowed under the 3-year time limit can be utilized to pay off other tax debts owed to the IRS or applied to your current year's estimated taxes.

Tax Law References
Internal Revenue Code, Section 6501 (3-year audit statute),
Section 6502 (10-year debt collection statute), and
Section 6511 (3-year refund statute).
For more information on how the IRS manages these statute of limitations, see Internal Revenue Manual, 25.6.1, Statute of Limitations.

Are You a Victim of Identity Theft?

Courtesy: IRS Video Portal

Poached Salmon Recipe

Poached Salmon Recipe
Ingredients:
• 2 cups water
• 1/2 cup dry white wine (pinot blanc)
• 1 yellow onion,  sliced
• 1 carrot, shredded
• 1 rib celery, shredded
• 2 tbsp lemon juice
• 1/2 tsp salt
• 1/4 tsp pepper
• 3 sprigs fresh thyme
• 1 sprig dill
• 4 (6 ounce ea.) salmon fillets
Directions:
• Combine water and wine in a slow cooker and heat on high for 20 to 30 minutes. Add onion, lemon, thyme, dill, salt & pepper, carrot and celery.
• Carefully lower salmon fillets into liquid so liquid just covers salmon. Cover and cook on low for about 35 to 40 minutes, until the salmon is light pink, opaque and cooked through according to taste. Serve hot or cold.
Prep: 5 min.
Cook: 1 hr.
Serves: 4
Per serving:
• 288 Cal.
• 11g fat (2g Sat.)
• 94 mg Chol.
• 1g Fiber
• 34g Protein
• 6g Carb.

Aiming for financial success

In pursuit of finding the secret to success; make what you need and then don't lose the money!  Consider the following:
• Live below your means.
• Drive your car until it falls apart.
• Brew your own coffee at home.
• "Brown bag" it to work.
• Don't invest in things you don't understand.
• Marry someone with similar work ethic and financial priorities as yours.
• Put your goals in writing.
• Re-check your financial plan every year.
• Save for retirement first, then children's education.
• Do not be pressured into giving away money or jeopardizing your family's financial stability. Give only what you can of your time and money to charity.
• And, of course, buy low, sell high!

The first lesson is simple common sense: to get rich, spend less than you make.  Money buys security and peace of mind, something we all desire.  
• "Remember, money may not be the most important thing in the world, but it's way ahead of whatever is in second place." -- Anonymous
• "God says you can resist the Devil." -- Corinthians 10:13

Tax Refund Scams

Courtesy: IRS Video Portal