Tuesday, February 12, 2013

Still Thinking About Taxes After Death

Jack is the personal representative who was appointed by the court for his mother’s estate after her death.  He’s worked hard to start the probate process properly. 

One of those early steps is to apply for an Employer Identification Number (EIN), which is a nine-digit number for IRS filing and reporting purposes, even though he will not be an employer.  It is sometimes called a TIN now (as in Taxpayer Identification Number), which refers generically to both EINs and social security numbers (SSNs).

His mother’s SSN must be used to file the tax return for the last partial year she was alive.  But as of the date of her death, any more income, such as interest, dividends or rent that her assets earn needs to be reported under the EIN Jack will obtain now.

Jack obtains it by completing an online IRS form, which has essentially replaced the old one-page IRS Form SS-4.  The questions on the form are customized to the earlier answers he gives online. 

It can be a bit of a maze, so it is useful to have the estate attorney or accountant actually type through the online form sitting right next to Jack.  So long as the IRS server is operating properly, the EIN is then created immediately, and the IRS letter ‘assigning’ the number can be printed out.

In theory, Jack could use the paper SS-4 form and apply by mail instead, and he would receive the number within about four to six weeks.

For legal and practical advice about simplifying required after-death procedures, call our office at (815) 436-1996 for an appointment.  © 2013 Gruber Law Office, Ltd.


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