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What taxes are due for a deceased person in Massachusetts?

On Behalf of | Aug 25, 2020 | Probate And Estate Administration |

A person’s debts do not go away after he or she dies. Creditors could file claims against the estate. If solvent, the estate may need to settle the debts, including ones related to local and federal taxes. Estate heirs and trust beneficiaries in Massachusetts may wonder what taxes require payment after someone dies.

A federal income tax form must be filed on behalf of the deceased person. The IRS regulations explain the minor added requirements for filing a return for a deceased person. Estate heirs and trust beneficiaries must also file a personal income tax return for the state of Massachusetts.

Personal income tax returns might not present much confusion, even when filing for a deceased person. Estate taxes, however, might raise questions among heirs or trust beneficiaries. Under federal law, an estate tax return becomes necessary on estates worth $11.58 million or more.

States may have inheritance or estate tax requirements. Massachusetts maintains an estate tax but not an inheritance tax. In Massachusetts, there is an exemption amount on estates. Estates worth under $1 million are not subject to filing estate tax returns. Be aware that the figure also includes “adjusted taxable gifts.”

Massachusetts residents who are heirs of a resident in another state may need to file estate or inheritance returns in that state. Speaking with an attorney may help someone clarify matters related to another state’s requirements.

Other taxes could come into effect when someone dies. A person who inherits assets and then sells them may be subject to long-term or short-term capital gains taxes.

The estate planning process may involve discussions about potential tax liabilities. Estate planning might also involve writing a will, crafting a health care proxy and other steps.

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