Lost a Loved One to COVID in 2020? Will You Have to Deal With the IRS?

There’s no denying the grief and anger suffered by those who have lost loved ones during the COVID pandemic. Unfortunately, the struggle goes far beyond these emotions to include practical matters such as federal tax returns.

As you grieve the loss of a spouse or family member, keep the following tax concerns in mind:

Prepare a Final Individual Tax Return

No matter the circumstances of your loved one’s death, you’ll need to make arrangements to complete a final individual tax return. In many ways, this resembles a typical tax return. This reality may actually be of some comfort, as the process should at least look familiar.

In the last tax return, all income and deductions must be reported or claimed. Depending on these factors, you may need to make a payment to the IRS on the deceased taxpayer’s behalf. Unfortunately, you may also need to cover tax returns and payments for previous years if the person in question fell behind.

What About Stimulus Checks?

Beyond tax returns, the death of a loved one can cause complications related to stimulus checks. Shockingly, the spouses of people who died from COVID shortly before receiving their stimulus payments have been forced to send the money back. This policy applies to payments received early on in the pandemic but could also be an unfortunate reality if a second stimulus is approved.

At the Highland Tax Group, we understand how tax issues can compound the pain of losing a loved one. We’re here to help. Contact us today to learn more about our tax services, which can remove at least one source of stress during this difficult time.