The passing of a loved one can be a difficult time, and the responsibilities of being an executor of their estate can add additional stress. In Texas, if you have been named as the executor of a deceased person’s estate, it is important to understand the legal requirements, including the potential requirement to file a tax return. This guide will provide an overview of the estate tax return requirements in Texas, including when a return needs to be filed, what is included in the estate for tax purposes, and the deadlines for filing.
Determining the Estate Value
The first step in determining if a tax return needs to be filed is to determine the value of the estate. The value of the estate includes all property and assets owned by the deceased at the time of their death, minus any debts or liabilities. This includes real estate, bank accounts, stocks, bonds, and personal property.
The federal estate tax exemption amount for deaths in 2021 and 2022 is $11.7 million. If the value of the estate is less than this amount, no estate tax return needs to be filed. If the estate value exceeds the exemption amount, a tax return must be filed with the Texas Comptroller of Public Accounts.
Texas Estate Tax
In Texas, there is no state estate tax. This means that a tax return does not need to be filed with the state. However, if the estate’s value exceeds the federal exemption amount, a federal estate tax return (Form 706) may still need to be filed with the Internal Revenue Service (IRS).
Deadlines for Filing
In Texas, the deadline for filing a tax return is 9 months after the date of death. If an extension is needed, a request can be made to the Comptroller of Public Accounts or the IRS.
Included in the Estate for Tax Purposes
For tax purposes, the estate includes all property and assets owned by the deceased at the time of their death, regardless of who is named as the beneficiary. This includes real estate, bank accounts, stocks, bonds, and personal property.
It is important to note that certain assets may have different tax treatment. For example, retirement accounts, life insurance proceeds, and annuities may have different tax implications and should be evaluated carefully when determining the value of the estate.
In conclusion, as an executor of an estate in Texas, it is important to understand the requirements for filing a tax return. This includes determining the value of the estate, determining if a tax return is required, and meeting the deadlines for filing. If you are unsure of your responsibilities, it is recommended to consult with a probate attorney for guidance.
Navigating the complex rules and regulations in Texas probate law can be challenging, but with the right guidance and support, you can fulfill your responsibilities as an executor with confidence.
For a FREE attorney consultation, call us TODAY at (281) 219-9090.