The conclusion of a life not only leaves memories but also financial Affairsthat need to be regulated. The Tax return for deceased persons is an important step in completing a deceased person’s tax affairs until their death. Read why and when tax returns are necessary for deceased people, who has to submit them and which ones How does it differ from inheritance tax? gives.
Why a tax return for deceased people?
The purpose of the tax return for the deceased is to… tax matters of the deceased person until their death. The obligation to file a tax return for the deceased occurs when the deceased person earned taxable income between the beginning of the year and the date of death. If this income is not already provided by the Deduction of wage or capital gains tax have been paid, the declaration is due.
What is the difference to inheritance tax?
Inheritance tax and deceased tax returns are two different tax matters related to a person’s death. They have different purposes and are used differently.
Die Inheritance tax is a tax on inherited assetswhich is paid by the heirs.
Die Tax return for deceased persons is a declaration that covers the tax affairs of the deceased person until their death and is submitted by the heirs or the executor of the estate.
However, both are part of the process when someone dies and assets are transferred to heirs.
When is a tax return not necessary for deceased people?
In Germany, a tax return for the deceased is not required if the deceased person died in the year of their death has not earned any taxable income or if all taxable income already through the deduction of wage or capital gains tax (e.g. by the employer or the bank). In such cases, the heirs or the executor of the estate usually do not have to file a tax return for the deceased person.
But often it can worthwhile, voluntarily one tax declaration for the deceased person. This means that excess tax paid can be reclaimed by the tax office. The deadline for this is four years after the end of the year of death.
Tax return for deceased persons
A deceased person’s tax return is similar to a living person’s tax return. All income of the deceased person must be recorded. Expenses incurred such as travel costs, extraordinary expenses and tradesman costs can also be claimed.
If you cannot find the documents and evidence you need in the estate, you can obtain them from institutions such as banks, health insurance companies or pension funds information after presentation of the certificate of inheritance. The tax office can too Copies of old tax assessments provide. Provided that the deceased person filed the tax return alone.
Under certain conditions, funeral costs can be as follows Extraordinary expenses are deducted from taxespecially if you had to bear the costs for legal or moral reasons.
Who has to submit the tax return?
There is one in Germany clear orderWho is considered as an heir if there is no will:
- Spouse or registered life partner
- Kinder
- grandchildren
- Parents
- Siblings
- grandparents
- Other relatives
Only if no heirs are found in this order or if no living relatives are known can the local court or tax office issue one estate manager or Executor order. This will take care of the deceased’s affairs, including filing tax returns.
In one Community of heirsin which several people are joint heirs of the deceased, the members must jointly regulate the tax affairs of the deceased, including filing tax returns for the deceased.
The competence and responsibilities within the community of heirs should generally be in one Inheritance dispute or one Inheritance contract be determined. In practice, this can mean that a member of the community of heirs becomes the so-called “executor“ is appointed to take responsibility for tax matters and prepare and submit the tax return on behalf of the community of heirs.
Deadlines for tax returns
Die Tax deadline for tax returns for deceased persons in Germany generally corresponds to the deadline for the regular income tax return. This means that the tax return is usually for deceased people until July 31st of the following year must have been received by the tax office after the date of death.
If the heirs or the executor of the estate cannot meet the deadline, they have the option of submitting one Extension of deadline to apply. This extension may be granted if there are valid reasons, which prevent the tax return from being submitted on time. These include, for example complex estate matters or Difficulties in obtaining the necessary documents.
The extension of the deadline must be applied for in writing to the responsible tax office Justification for the extension must be plausible. The tax offices can usually grant a reasonable extension of the deadline if the reasons are sufficient. The length of the extension granted may vary depending on individual circumstances, however be several months.
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Tax debts or refunds for deceased persons
If the deceased has tax debts, the following regulations apply in Germany:
- Settlement of tax debts: The deceased’s tax debts must be paid from the deceased’s estate. This means that the debts must be covered primarily by the deceased’s assets, such as funds in bank accounts or other assets.
- Inheritance tax: Tax liabilities can affect the amount of inheritance tax payable by heirs. The debts usually reduce the value of the inherited assets and can therefore result in lower inheritance taxes.
- Estate settlement: Paying tax debts is one of the tasks of the estate administrator or heirs. You must ensure that tax debts are properly paid from the estate.
- Statute of limitations: Tax debts usually do not expire after the taxpayer’s death. The statute of limitations may vary depending on the type of tax liability. Keep an eye on statutes of limitations and pay tax debts on time to avoid potential interest and penalties.
Die Tax refund belongs to estate of the deceased person. So heirs or the community of heirs have Right to this reimbursement. Distribution is usually done according to the inheritance quotasunless in Testament or Inheritance contract something else was specified.
The use of reimbursement can be varied. She can go to Coverage of estate liabilitiessuch as open Bills or debts of the deceased, can be used. If there are no debts or liabilities and the heirs receive the entire refund, they are usually free to use the funds to use according to their needs.
The refund must be properly recorded on the deceased’s tax return. The Responsibility for this lies with the heirs or the estate administratorwho must ensure that the refund is included in the tax return and treated correctly for tax purposes.
Advice and help for the taxes of deceased persons
One private funeral insurancesuch as IDEAL death benefit insurance, is of particular importance when it comes to tax returns for the deceased. She will be in the Typically not counted as part of the deceased’s taxable income, which is why it does not have to be taxed. This represents a significant relief for the financial situation of the surviving dependents, as they do not have to worry about tax aspects.
Die Funeral insurance offers the relatives an important one financial validation with regard to funeral costs, which can often be significant.
This allows the surviving family to fulfill the deceased’s funeral wishes without additional financial burdens at an already difficult time.
Term life insurance can be claimed as “other pension expenses” as part of the tax return for the deceased. Contributions that the deceased person paid for term life insurance during their lifetime, can therefore be taken into account for tax purposes. The relatives can declare these expenses in the tax return in order to receive tax breaks or tax refunds if necessary. This also reduces the financial burden on the surviving dependents.
However, in cases of tax debts and complex tax matters, it is advisable to contact one tax consultant or Lawyer to ensure that the Debts are properly recorded and paid and that all tax Obligations of the deceased are fulfilled.
Cover photo: © fizkes / iStock.com
2023-09-19 06:31:31
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