Caller
“Good morning, Gene. I have a question. My mother died last February and did not earn enough money to meet the threshold for the federal tax return. Do I have to file a final return for her saying that she’s died?”
Gene
“Yes. This will alert a number of federal agencies – the IRS, social security, Medicare, etc., that she has passed and it closes those accounts. It prevents future opportunities for fraud, identity theft, etc. So even though she will not owe any tax, it’s very important that you file a final return.”
Caller
“Okay, thank you. My second question is related. Last year, when her accountant filed the Pennsylvania taxes, he withheld $1,400 and gave it to the state of Pennsylvania to pay her estimated taxes. Since she died in February, she didn’t have to pay any estimated taxes. I know I have to file Pennsylvania to get that back but do I have to file another inheritance tax too? Because the state of Pennsylvania has been holding that money and she didn’t have it in her account when she died.”
Gene
“The attorney that assisted you when your mother passed away, did they file a Pennsylvania inheritance tax form?”
Caller
“Yes.”
Gene
“Then I strongly suspect that’s already been taken care of.”
Caller
“Hmm. Okay. I’ll have to check with them.”
Gene
“Yes. A very good idea. Make sure you confirm that. But I strongly suspect that the attorney would have taken that into account as part of the assets that your mother either had or would have expected. I strongly suspect it was taken into account. If not it, yes. There may need to be a very small, we’re talking about $40 or $50, a very small adjustment, but I’m hopeful that the attorney’s already addressed that in the Pennsylvania return.”
Caller
“Okay. Thank you very much. I appreciate it.”
Do you want your financial question to be featured on the More than Money radio show? Call between 8 & 10 every Saturday morning to talk with Gene on-air. (610) 720-7900.