Several Returns, Not One
After a death, there may be several different tax returns to consider, and they do not all report the same thing. The deceased person may need a final individual income tax return. The estate may need its own income tax return for income received during administration. A Massachusetts estate tax return, and sometimes a federal estate tax return, may also be required. Filing one does not automatically take care of the others, even when everyone refers to them casually as “the estate taxes.”
The Final Individual Return
The final federal individual return is generally Form 1040 or 1040-SR, covering the deceased person’s income through the date of death under the applicable tax rules. A final Massachusetts individual return may also be required. The usual filing requirements still matter, and unfiled returns from earlier years do not disappear because the taxpayer has died. A surviving spouse may be able to file a joint return for the year of death, depending on the circumstances. See IRS guidance on final individual returns.
The Estate’s Own Income Tax Return
The estate’s income tax return is separate. After death, an estate may receive interest, dividends, rent, or income connected with property transactions. A domestic estate generally must file federal Form 1041 if it has gross income of $600 or more during the tax year, or if it has a nonresident alien beneficiary, with additional rules that may apply. That relatively low threshold means an estate can need an income tax return even when it owes no estate tax at all. See IRS Form 1041 filing requirements.
How the Income Gets Split
For example, suppose your father dies owning an investment account that remains in his estate for several months. Income reportable before his death and income received by the estate afterward may belong on different returns. If the estate distributes income to beneficiaries, Schedule K-1 may be involved in reporting their shares. The accountant needs the dates, account records, and distribution information to make those distinctions, rather than simply placing every tax form bearing your father’s name on his final 1040.
Massachusetts Fiduciary Income Tax
Massachusetts also has a fiduciary income tax return, Form 2, and its filing rules are not identical to the federal rules. Trusts involved in the plan may have separate reporting obligations as well. This is one reason we want the accountant to see the full ownership arrangement. An estate account, a continuing trust, and an account payable directly to a beneficiary can produce different reporting responsibilities even though all three arose from the same death. See Massachusetts fiduciary income tax guidance.
The Massachusetts Estate Tax Return
The Massachusetts estate tax return, Form M-706, concerns the transfer of wealth at death. Under current rules, a Massachusetts resident’s estate generally must file when the gross estate plus adjusted taxable gifts exceeds $2 million. The calculation is broader than the property passing through probate, so assets held in a trust or passing through other arrangements may still matter. The return and any tax due are generally due nine months after death. See Massachusetts estate tax guide.
The Federal Estate Tax and Portability
Federal estate tax has a separate threshold. For a U.S. citizen or resident dying in 2026, the basic exclusion amount is $15 million, with the filing calculation also taking relevant lifetime gifts into account. A federal Form 706 may also be filed for portability purposes even when no federal estate tax is due, preserving an available unused exclusion for a surviving spouse. That requires its own analysis and does not transfer an unused Massachusetts exemption. See IRS federal estate tax instructions.
Plan the Returns Early
We would have the personal representative and accountant identify the required returns early, rather than wait until the estate is nearly ready to close. Prior returns, date-of-death values, income records, and a clear record of distributions all help. Filing deadlines and payment deadlines also need separate attention because an extension to file does not necessarily extend the time to pay. Before the remaining money goes to beneficiaries, the estate should have a coordinated plan for the tax obligations still outstanding.
Start with a free 15-minute consult call with Nicole Ott, our Lead Intake Coordinator. Tell her roughly what the estate holds and whether any returns have been filed. That is usually enough for us to say which returns to expect.
