Everyday people are facing a tast that may be the first aquaintance they have had with this important part of ife, that of closing the books on a loved one's estate for the last time.  Most of the time people accept the responsibility as the executor for an estate when asked by a friend or relative, without giving it much thought. Few understand what is expected of them or the possible risks they may face as an executor.  Here are some suggestions which may assist you as you face this task. Please be reminded that we are not in the position of offering tax advise but some suggestions that should assist you as you work with your tax professional.  If you find yourself in the position of an executor, our first suggestion would be to put together a plan of keeping track of estate income and expenses and the expenses you incure in settleing the estate, some or all of these will assist in filing the taxes when do.

1. It is very important to surround yourself with persons that you know and trust, who have knowledge necessary for issues you may face to review and discuss each issue with. Mistakes can be costly and affect dependents for years to come as well as yourself.  You could also face issues with the IRS that you could be liable for, personally.
2. As an executor you are responsible for paying all estate liability, including taxes from estate asests. If you neglect these or are not timely the IRS can hold you personally responsible for overdue taxes, interest, and any penalties.
3. The executor must inform the government that an estate exits and that they will be acting on behalf of the estate.  A Form SS-4 should be applied for (Application for Employer Identification Number) at www.irs.gov
4. The executor should also apply for a Form 56 at the same site www.irs.gov   (Notice Concerning Fiduciary Relationship)  This form lets the IRS know who will be handling the estate financial matters.
5. The executor should also file Form 1040 (Income Tax Return) for income earned by the decease for the year of death. This final return is treated like an other income tax return and is due by April 15th.  This could be filed as an individual return or a joint return with the decedent's spouse.(A tax professional should be retained to assist you with this. Our value added services network offers the servies of a qualified CPA, should you need a referral for this assistance)  The CPA would be able to best address issues of expenses and what would be best moved to the Estate Tax return for the maxium benefit. There are some special benefits for move some final expenses as medical expenses to the Estate Tax return some times.
6. The executor can apply for the Estate Tax return at www.irs.gov as well. Form 1041 U.S. Income Tax Return fo Estates and Trusts.  The government will tax the estate depending on its size and income. Income in excess of $600 for the year will triger the necessity of a return. Estate taxes may need to be dealt with for both the Federal and State or multi states if there are assests in more than one state. Estate taxes can be both complex and full of constain change. The services of a CPA or other professional tax preparer may save you a lot of grief and time. All estate taxes are due from the estate and are the responsiblity of the executor for being timely paid.