What Is a Form 1040? Definition, Uses and Importance.

Form 1040 refers to federal income tax that may have to be paid during the probate process.

Filing form 1040 federal income tax during probate

At the death of the decedent, all his income, deductions, and credits he is entitled to will be compiled and the final income tax will be deducted from the amount in the same way it was before his death. 

Importance of the 1040 form

The process of filing the 1040 form accurately and in time will hasten up the estate administration process. In cases where the decedent is due an amount refundable by the IRS, that amount can add to the total amount of the deceased estates.

Federal Estate Tax

The federal estate tax is levied on a millionaire or billionaire with over $5.3 million in assets. This tax is not paid by every citizen. The federal income tax, on the other hand, is different from the federal estate tax and must-pay by every citizen of the country not minding how much they have in assets.

While the federal estate tax is charged on the entire assets of a deceased person, the federal income tax is charged on income earned on an annual basis If the decedent died before paying for the current year’s income tax, his income up till the day of death is taxed.

Some states have estate tax and inheritance tax which is different from federal estate taxes

Some states have an estate tax and others have an inheritance tax. These are different taxes that must be paid at a state level and are different than the federal estate tax charged to estates with over $5.3million in net assets. Here are the states that employ these different taxes:

States with an estate tax:

• Connecticut
• Illinois
• Maine
• Massachusetts
• Minnesota
• New York
• Oregon
• Rhode Island
• Vermont
• Washington (state)

States with an inheritance tax:

• Iowa
• Kentucky
• Nebraska
• New Jersey
• Pennsylvania

States with Estate and Inheritance Tax

• Maryland

Timeline for filing the 1040 form

The final federal income tax or 1040 form is filed in April of every year. Failure to do this in April, the procedure will have to be extended till April of the next year.

How the 1040 form works

The payment of the final federal income tax must be complete and accurate. As such, if the decedent had unpaid income taxes in years preceding his death, the executor must first pay the accrued taxes before moving to the ones in the period after his death.

Also, if the decedent is due a refund from the IRS, it must be remitted and added to his estate before further administration begins.