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How to do tax return for a deceased person

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In general, a deceased person's individual tax returns are prepared and filed in the same manner as when they were alive. Even death doesn't save a person from having to pay taxes! If you’re the executor or personal representative of a deceased person, you must file the final tax return of the decedent for the year of death and any return not filed for preceding years.  All income up to the date of death must be reported as well as all credits and deductions to which the decedent is eligible may be claimed. The general tax rates with the full tax-free threshold apply if they are an Australian resident and the Medicare levy and Medicare levy surcharge may also be payable. You might also need to file a separate estate tax return for income received after the person’s death. A deceased estate is treated as a trust for tax purposes with you as the executor is the trustee for the deceased estate trust. Therefore, as well as lodging a date of death Tax return for individuals, you may also need to lodge Trust tax returns for the deceased person's estate. Deceased estate means, the property and assets belonging to a person who has died. The deceased estate is detained in trust from the death of the person until the handover of the property and assets to the beneficiaries.

The executor need to lodge a date of death tax return on behalf of the deceased person if they:

  • Had tax withheld from the income they got;
  • Received taxable income above the tax-free threshold;
  • Had tax withheld from interest or dividends because no TFN was mentioned to the investment body;
  • Lodged tax returns in prior years.

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