Can't file dad's last tax return...

[CindyBlue]

My very experienced tax lady said this is a first for her, and so far this year, it's happened twice.

My dad died on Jan 16, 2021, therefore I need to file a "final" tax return for him for that year. But when my tax lady filed his final tax statement, it was rejected because "The SSN used in the filing has been locked by the Social Security Administration because their records show it belongs to someone who is deceased."

She is at a loss as to what to do. We decided to just keep the records and wait to see if anything happens in the next few years.

He had received his January 2021 Social Security payment, which he was allowed to keep, so he had "income." And technically, because he was alive in 2020 and part of 2021, his estate is supposed to receive the last stimulus payment, too. Actually I did receive the check, made out to both him and me, so since I couldn't deposit it without his signature, and he was already gone, I returned it with a note asking them to reissue it in my name only. After many months, they sent me a letter saying that I wouldn't get it.

My tax lady said that of course I should get it, and put that in her document.

We are guessing that his tax return was rejected that so the government makes sure I don't get it (wry smile!)

To her credit, she told me she would return the money I'd paid her for doing the tax return, since it was rejected. I told her to keep the money, since she had already done all the work and that it was rejected wasn't her fault.

 

[Montecfo]

Are you executor of his estate? If so with death cert you probably could have deposited the check, depending on the bank.

I would file the tax return on paper-with a note on top written on a highlighter yellow pad. This is obviously a clerical error. You just need to get human eyes on it.

 

[pb4uski]

Assuming that you are the executor, file a paper return to get the stimulus payment that he was entitled to and be prepared to wait.... and wait.... and wait... and wait....

 

[cathy63]

His social security won't be taxable, so legally you don't have to file if that was the only income he had.

You can choose to file if you want the stimulus payment or if he had withholding from SS and you want a refund. At this point, I would just file a paper return and let them work it out.

If you are not an official court-appointed representative or executor of his estate, then make sure to attach form 1310 to the return.

 

[meierlde]

My very experienced tax lady said this is a first for her, and so far this year, it's happened twice.

My dad died on Jan 16, 2021, therefore I need to file a "final" tax return for him for that year. But when my tax lady filed his final tax statement, it was rejected because "The SSN used in the filing has been locked by the Social Security Administration because their records show it belongs to someone who is deceased."

She is at a loss as to what to do. We decided to just keep the records and wait to see if anything happens in the next few years.

He had received his January 2021 Social Security payment, which he was allowed to keep, so he had "income." And technically, because he was alive in 2020 and part of 2021, his estate is supposed to receive the last stimulus payment, too. Actually I did receive the check, made out to both him and me, so since I couldn't deposit it without his signature, and he was already gone, I returned it with a note asking them to reissue it in my name only. After many months, they sent me a letter saying that I wouldn't get it.

My tax lady said that of course I should get it, and put that in her document.

We are guessing that his tax return was rejected that so the government makes sure I don't get it (wry smile!)

To her credit, she told me she would return the money I'd paid her for doing the tax return, since it was rejected. I told her to keep the money, since she had already done all the work and that it was rejected wasn't her fault.

Did she note on the form that the tax payer had died. When my parents died I checked the box on turbotax and it printed it on the front of the form. (of course back then I filed by mail) Did the forms have deceased printed right after the taxpayer name?

 

[Sunset]

Sounds like the tax preparer didn't check the deceased box, that's how it is with H&R Block software.
Then it asks some more questions like executor status, etc.. for form 1310.

A person doesn't have to be executor to file a return for a deceased (actually it's less paperwork if not), from what I experienced.

I e-filed for the Fed return without any issues.

 

[athena53]

You were too honest.

DH died in 2016. I filed a return and noted his death date. The next year I realized I'd made a mistake and a small refund was due so I filed a 1040X. Both the state and the Fed refund checks were made out to "Athena53 and Mr. Athena53, Deceased".

I think I deposited them in the bank's ATM after endorsing the back with just my name. No problems whatsoever.

 

[CindyBlue]

Wow, there is some great advice here! I will be talking to my tax lady! Thank you!

 

[oldtimer]

If the only income was his "Dec20 benefit" that was paid in Jan21 and no other income in 2021, his taxable income would be 0. Can't file electronically with 0 taxable income, need to add $1 other income with a note "to allow efile".


If SS check was his Jan21 benefit, that would not be received until Feb21 and since he died before living the full month of Jan21 would not be eligible to receive his Jan21 benefit.

 

[SecondCor521]

If SS check was his Jan21 benefit, that would not be received until Feb21 and since he died before living the full month of Jan21 would not be eligible to receive his Jan21 benefit.

From OP it sounds like it was the 12/20 payment received in 1/21, and since he was alive in January that means he was entitled to the 1/21 payment for 12/20.

I agree with the others that the tax preparer should have checked the deceased box in their software, which should have printed "Deceased", the taxpayers name, and the date of death at the top of the Form 1040.

I've only done one return like that but it was e-filed and accepted.

The following IRS resource may help:

https://www.irs.gov/businesses/smal...ling-the-final-returns-of-a-deceased-taxpayer

There is also some verbiage about it in the 1040 instructions (search for "deceased"):

https://www.irs.gov/instructions/i1040gi

 

[CindyBlue]

If the only income was his "Dec20 benefit" that was paid in Jan21 and no other income in 2021, his taxable income would be 0. Can't file electronically with 0 taxable income, need to add $1 other income with a note "to allow efile".


If SS check was his Jan21 benefit, that would not be received until Feb21 and since he died before living the full month of Jan21 would not be eligible to receive his Jan21 benefit.

Good point - so that means the SS we received was his December check, which was why he was allowed to keep it. I asked them specifically because I was sure I'd have to return it, but I was told I didn't have to.

 

[CindyBlue]

From OP it sounds like it was the 12/20 payment received in 1/21, and since he was alive in January that means he was entitled to the 1/21 payment for 12/20.

I agree with the others that the tax preparer should have checked the deceased box in their software, which should have printed "Deceased", the taxpayers name, and the date of death at the top of the Form 1040.

I've only done one return like that but it was e-filed and accepted.

The following IRS resource may help:

https://www.irs.gov/businesses/smal...ling-the-final-returns-of-a-deceased-taxpayer

There is also some verbiage about it in the 1040 instructions (search for "deceased"):

https://www.irs.gov/instructions/i1040gi

I just sent exactly what you told me here to my tax lady! Thank you!

 

[cathy63]

I just sent exactly what you told me here to my tax lady! Thank you!

You can tell whether or not she did the return correctly by looking at your copy of the 1040. Do you see "Deceased" anywhere in the name boxes or along the top of the page? The software we use at Tax-Aide puts it in the Last Name box along with the date of death, and it would also put your name (as the representative) in the Address box, but other software may do things differently. It should definitely be near the top of the page.

Even if she did it incorrectly and corrects it now, I don't think she can e-file a return against a locked SSN. The IRS doesn't accept e-files for any year after the tax year in which the taxpayer died. Theoretically they should accept a 2021 return for your father, but I can definitely imagine a scenario where someone made a typo last January and wrote/entered the date as 2020 instead of 2021. I do that myself for a while every year. The fact that they also denied your claim for the stimulus payment makes me think they may have an incorrect date of death.

If you have the paper return and it looks correct (i.e. it says "deceased" on it), the best thing to do is file by mail. You can find the IRS address for your state here: https://www.irs.gov/filing/where-to-file-paper-tax-returns-with-or-without-a-payment

 

[CindyBlue]

You can tell whether or not she did the return correctly by looking at your copy of the 1040. Do you see "Deceased" anywhere in the name boxes or along the top of the page? The software we use at Tax-Aide puts it in the Last Name box along with the date of death, and it would also put your name (as the representative) in the Address box, but other software may do things differently. It should definitely be near the top of the page.

Even if she did it incorrectly and corrects it now, I don't think she can e-file a return against a locked SSN. The IRS doesn't accept e-files for any year after the tax year in which the taxpayer died. Theoretically they should accept a 2021 return for your father, but I can definitely imagine a scenario where someone made a typo last January and wrote/entered the date as 2020 instead of 2021. I do that myself for a while every year. The fact that they also denied your claim for the stimulus payment makes me think they may have an incorrect date of death.

If you have the paper return and it looks correct (i.e. it says "deceased" on it), the best thing to do is file by mail. You can find the IRS address for your state here: https://www.irs.gov/filing/where-to-file-paper-tax-returns-with-or-without-a-payment

I finally found my copy of dad's latest tax return - I'd already filed it away! - and you are right, it says "deceased" at the top. I then wrote my tax lady to let her know that I now know this! I'll think about paper filing - not sure it's worth the trouble. I just hope the IRS doesn't come back to haunt me in the future (grin!)