The federal government requires deceased individuals to file a final income tax return.

When a family member passes away, there are many decisions that need to be made and many emotions to handle. The last thing anyone thinks about is taxes.

Unfortunately, even the deceased can’t escape taxation. If the departed family member earned taxable income during the year in which they died, then federal taxes may be owed. An executor or a survivor must, therefore, file a final federal income tax return (Form 1040).1

Similarly, if the deceased individual had a sizable estate or assets that might generate income in the future, the estate may owe taxes. Federal estate tax forms pertaining to the decedent’s estate may need to be filed (Form 1041, Form 706).2,3

The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult a professional with tax expertise if you find yourself in this situation.

Income Taxes

The Internal Revenue Service generally gives you until April 15 of the year following the taxpayer’s death to file a final 1040 form. If the deceased was married, a surviving spouse has the option to file a final joint federal tax return for the last year in which the deceased lived.4

If you file the return online, the IRS provides instructions on all of this. If you are filing a paper return, you must write “Deceased,” the decedent’s name, and the date of death at the top of the 1040 form. An appointed personal representative and/or surviving spouse must sign this return per IRS guidelines. If a refund is due, you may need to file a Form 1310 (Statement of Person Claiming Refund Due a Deceased Taxpayer).4,5

Estate Taxes

If an estate is large enough, Form 706 (the United States Estate Tax Return) is due to the IRS within nine months of the death of the deceased, with a 6-month extension permitted. The individual federal estate tax exemption is $15 million for 2026, so an estate smaller than $15 million may not be faced with estate taxes unless the deceased individual made substantial monetary gifts before their passing.6,7

When the decedent’s estate has an executor or administrator (in IRS terminology, an “appointed personal representative”), they must sign the return for the decedent. For a joint return, the spouse must also sign. Alternatively, a survivor of the deceased can file the return.4

If an estate generates more than $600 in gross yearly income within 12 months of that taxpayer’s death, it will also be necessary to file Form 1041 (U.S. Income Tax Return for Estates and Trusts), usually by April 15 of the year after the year in which the individual died. Should 100% of the income-generating assets of the deceased be exempt from probate, the need to file Form 1041 is removed. Estates required to file Form 1041 should consult a tax professional.8

Lastly, there are some cases where expenses paid before death can be deductible. Under certain circumstances, part of the cost of treating a final illness may be deducted from the deceased’s final federal tax return.9

You Are Not Alone

A death in the family can take a heavy toll. In the event of such a tragedy, the last thing you may want to do is deal with the related financial issues. Contact us – we are here to help.

1. IRS.gov, 2025
2. IRS.gov, 2025
3. IRS.gov, 2025
4. IRS.gov, 2025
5. Investopedia.com, July 8, 2025
6. IRS.gov, 2025
7. IRS.gov, 2025
8. IRS.gov, 2025
9. IRS.gov, 2025
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Is your estate in order? This short quiz may help you assess your overall strategy.

Do you have a will?

A will enables you to specify who you want to inherit your property and other assets. A will also enable you to name a guardian for your minor children.

Do you have healthcare documents in place?

Healthcare documents spell out your wishes for health care if you become unable to make medical decisions for yourself. They also authorize a person to make decisions on your behalf if that should prove necessary. These documents may include a living will, a power of attorney agreement, and a durable power of attorney agreement for healthcare.

Do you have financial documents in place?

Certain financial documents can outline your financial wishes. If you become unable to make decisions for yourself, these financial documents can be structured to empower a person to make decisions on your behalf. These documents may include joint ownership, durable power of attorney, and living trusts.

Check Box

Have you filed beneficiary forms?

In some cases, naming a beneficiary for bank accounts and retirement plans makes these accounts “payable on death” to your beneficiaries. In other cases, you will need to fill out a “Payable on Death” form.

Do you have the right amount and type of life insurance?

When was the last time you assessed your life insurance coverage? Have you compared the life insurance benefit with your financial obligations? Keep in mind that several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder may also pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

Have you taken steps to manage your federal estate tax?

If you and your spouse have more than $30 million in assets (for 2026), you may want to consider taking steps to manage federal estate taxes, which will be due at the second spouse’s death.1

Have you taken steps to protect your business?

Do you have a succession plan? If you own a business with others, you may also want to consider a buyout agreement.

Have you created a letter of instruction?

A letter of instruction is a non-legal document that outlines your wishes. A strong, well-written letter may save your heirs time, effort, and expense as they administer your estate.

Will your heirs be able to locate your critical documents?

Your heirs may need access to the specific documents you have created to manage your estate. These documents may include:

  • Your will
  • Trust documents
  • Life insurance policies
  • Deeds to any real estate, and certificates for stocks, bonds, annuities
  • Information on your financial accounts and safe deposit boxes
  • Information on your retirement plans
  • Information on any debts you have: credit cards, mortgages, and loans.

Note: Power of attorney laws can vary from state to state. An estate strategy that includes trusts may involve a complex web of tax rules and regulations. Consider working with a knowledgeable estate management professional before implementing such strategies.

1. IRS.gov, 2025
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Planning for a child with special needs can be complicated, confusing, and even overwhelming.

​Raising a child is expensive and can cost over a quarter of a million dollars, excluding college. For a child with special needs, that cost can more than triple. If you’re the parent of a child with special needs, it’s vital to ensure your child will continue to be provided for after you’re gone. It can be difficult to contemplate, but with patience, love, and perseverance, a long-term strategy may be attainable.1,2

Envisioning a Life After You

Just as every child with special needs is unique, so too are the challenges families face when preparing for the long term. Think about the potential needs of your child. Will they require daily custodial care? Ongoing medical treatments? Will your child live alone or in a group home? Can family members assume some of the care? Answers to these and other questions can help form the vision of what may need to be done to plan for your child’s care.

Preparing Your Estate

Without proper preparation, your child’s lifetime needs can quickly outstrip your funds. One resource is government benefits, such as Supplemental Security Income (SSI) and Medicaid, which your child may qualify for depending on their situation. Because such government programs have low-asset thresholds for qualification, you may want to consider whether to make property transfers to your child with special needs.

You should also make sure you have an up-to-date will that reflects your wishes. Consider creating a special needs trust, the assets of which can be structured to fund your child’s care without disqualifying them from government assistance. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.

Involve the Family

All affected family members should be involved in the decision-making process. If at all possible, it’s best to have a unified front of surviving family members to care for your child after you’ve passed on.

Identify a Caregiver

In order for a caregiver to make financial and health care decisions after your child reaches adulthood, the caregiver must be appointed as a guardian. This can take time, so start setting this in motion as soon as you are able.

To do this, you can write a “Letter of Intent” to the caregiver and family to express your wishes along with information about your child’s care. This isn’t a legal document, but it may help communicate your desires. Store this letter in a safe place, alongside your will.

Outlining an approach for a child with special needs can be complicated, but you don’t have to do it alone. Working with loved ones and qualified professionals can help you navigate the various facets of this challenge. If we can help, please don’t hesitate to reach out.

1. Investopedia.com, December 14, 2023
2. AmericanAdvocacyGroup.com, 2024
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Federal estate taxes have long since been a lucrative source of funding for the federal government.

Federal estate taxes have been a source of funding for the federal government almost since the U.S. was founded.

In 1797, Congress instituted a system of federal stamps that were required on all wills offered for probate when property (land, homes) was transferred from one generation to the next. The revenue from these stamps was used to build the Navy for an undeclared war with France, which had begun in 1794. When the crisis ended in 1802, the tax was repealed.1

Estate taxes returned during the build-up to the Civil War. The Revenue Act of 1862 included an inheritance tax, which applied to transfers of personal assets. In 1864, Congress amended the Revenue Act, added a tax on transfers of real estate, and increased the rates for inheritance taxes. As before, once the war ended, the Act was repealed.1

In 1898, a federal legacy tax was proposed to raise revenue for the Spanish-American War. This served as a precursor to modern estate taxes. It instituted tax rates that were graduated by the size of the estate. The end of the war came in 1902, and the legacy tax was repealed later that same year.1

In 1913, however, the 16th Amendment to the Constitution was ratified – the one that gives Congress the right to “lay and collect taxes on incomes, from whatever source derived.” This amendment paved the way for the Revenue Act of 1916, which established an estate tax that in one way or another, has been part of U.S. history since then.1

In 2010, the estate tax expired – briefly. But in December 2010, Congress passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The new law retroactively imposed tax legislation on all estates settled in 2010.2

In 2012, the American Tax Relief Act made the estate tax a permanent part of the tax code.3

As part of the 2017 Tax Cuts and Jobs Act, estate tax rules were adjusted again. The estate tax exemption was raised to $11.2 million, a doubling of the $5.6 million that previously existed. Married couples were able to pass as much as $22.4 million to their heirs. As of 2025, that rate has risen to $13.99 million per individual (and $27.98 million for married couples). If you’re uncertain about your estate strategy, it may be a good time to review the approach you currently have in place.4

Estate Taxes and Overall Federal Revenues

Estate taxes typically account for about one percent of total federal revenue.5

Chart Source: Treasury.gov, August 12, 2025

Exemption through the Years

Federal estate taxes exempt a share of estates from federal estate taxes. For the 2025 tax year, if an estate is worth less than $13.99 million, no federal estate taxes may apply.4

Year Exclusion Amount Highest Tax Rate

2013 $5,250,000 40%
2014 $5,340,000 40%
2015 $5,430,000 40%
2016 $5,450,000 40%
2017 $5,490,000 40%
2018 $11,180,000 40%
2019 $11,400,000 40%
2020 $11,580,000 40%
2021 $11,700,000 40%
2022 $12,060,000 40%
2023 $12,920,000 40%
2024 $13,610,000 40%
2025 $13,990,000 40%

Chart Source: IRS.gov, 2024

1. IRS.gov, 2025
2. Congress.gov, 2025
3. Congress.gov, 2025
4. Investopedia.com, February 10, 2025
5. Treasury.gov, August 12, 2025
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Explore how the One Big Beautiful Bill may affect taxes, deductions, and credits now and in the years ahead.

On July 4, the One Big Beautiful Bill was signed into law at a White House ceremony. This domestic policy bill extends the 2017 tax cuts set to expire this year, making some of those rules permanent. The bill also creates several new tax laws for individuals while addressing other tax issues for businesses.1,2

It might be a good time to check with your tax, legal, or accounting professional about the changes in the law. Some will start this year, while other changes will kick in in 2026. Like previous tax laws, some new rules are scheduled to expire, while others are permanent. Here’s a look at changes expected to impact most tax filers shortly.

Taxes

One key feature of the One Big Beautiful Bill Act is the extension and revision of some of the tax laws that were part of the 2017 Tax Cuts and Jobs Act (TCJA). Here’s a quick summary of the three changes we found the most interesting:

Extension of Tax Rates

The bill extends the current tax rates of the 12 percent, 22 percent, 24 percent, 32 percent, and 37 percent brackets, respectively. Had the TCJA expired, the rates would have reverted to 15, 25, 28, 33, and 39.6 percent. The sixth tax bracket stayed the same at a 35 percent tax rate.1,2

Standard Deduction

It also increased the standard deduction to $15,750 for single filers and $31,500 for those filing jointly for 2025. Both are slightly rising from the current rate. Note: The standard deduction will adjust for inflation starting next year.1,2

State and Local Tax Deduction (SALT)

The SALT will increase to $40,000 in 2025 and will increase 1 percent annually until 2030. However, in 2030, it will revert to $10,000. Note: SALT has a $500,000 threshold for single and married filers.1,2

The “Bonus” Deduction

The new “bonus” deduction for older Americans has received much attention since the One Big Beautiful Bill Act became law on July 4. Here’s what’s changing for seniors with the new bill. Starting in 2025, the bill provides a $6,000 bonus deduction for filers 65 and up in addition to the standard deduction available to all taxpayers. The new rule will also affect unmarried/non-surviving spouses. The deduction begins to phase out for individuals with incomes starting at $75,000, or joint filers with an income of $150,000. It phases out completely for individuals earning more than $175,000 and couples earning $250,000. Note: The bonus deduction ends in 2028.1,2

Child Tax Credit

Starting in 2025, the child tax credit of $2,000 will increase to $2,200. The credit also has a COLA (cost-of-living adjustment) attached.1,2

Dependent Care

The bill, which will take effect in 2026, increases the dependent care flexible spending account limit from $5,000 to $7,500. It also raises the maximum percentage of qualified expenses for dependent care from 35 percent to 50 percent.1,2

American Family Account

The government will make a one-time $1,000 payment into an account for babies born between 2025 and 2028. Note: Parents can add up to $5,000/year. No withdrawals are allowed before age 18.1,2

529 Expansion

The bill extends the 529 umbrella to cover nontuition expenses related to elementary or secondary school attendance. In addition, starting in 2026, the cap for tuition-related expenses increases from $10,000 to $20,000.1,2

New Car Loans

Between 2025 and 2028, a $10,000 deduction on new car loan interest will be available, but some limitations will apply (such as the car needing to be brand-new). First, the deduction will be reduced if your gross income exceeds $100,000, or $200,000 if you are married. The car’s final assembly must occur in the U.S. to qualify for the deduction.1,2

Electric Vehicle (EV) Subsidies

Some home improvements (such as windows) and residential energy credits (adding solar) end after December 31, 2025. EV credits for new and used cars end after September 30, 2025.1,2

Small Business Deductions

The new law permanently establishes a deduction of up to 20 percent of qualified business income for sole proprietorships, partnerships, and S-corps.1,2

100 Percent Expensing of Capital and Factory Investments

The bill restores the provision that allows businesses to expense 100 percent of capital investments made on or after January 19, 2025. However, some limitations may apply.1,2

1099-K

The new law sets the reporting limits at $20,000 and 200 transactions for transactions on cash apps. Note: The rule starts in 2025. It rolls back the $600 threshold set in previous legislation.1,2

No Tax on Tips

A new $25,000 deduction for tips starting in 2025 and ending in 2028 is part of the new law. The deduction is reduced if your gross income exceeds $150,000, or $300,000 if you are married and filing jointly. Note: The tax on tips provision is allowed, even if you take the standard deduction.1,2

No Tax on Overtime

New overtime deductions were created, starting in 2025 and ending in 2028. These comprise a $12,500 deduction (single filers) and a $25,000 deduction (married filing jointly). Note: Like no tax on tips, the deduction reduces if your gross income exceeds $150,000, or $300,000 if married filing jointly.1,2

Charitable Contribution Recordkeeping

Charitable contributions of $1,000 for individual filers and $2,000 for married couples filing jointly are now deductible, even if you don’t itemize your deductions.1,2

Estate and Gift Tax Exemption

The bill increases the estate and gift tax exemption starting in 2026. This year, it is capped at $13.99 million for single filers and $27.98 million for married filing jointly. In 2026, it will increase to $15 million for single filers and $30 million for married filing jointly. Note: The exemption will increase with inflation.1,2

A Note on Estate Management

Ever since the Tax Cuts and Jobs Act of 2017, there has been an ongoing concern that the estate and gift tax exemption would revert to the 2017 level in 2025. Although the new bill extends the rule, it may change again sometime in the future. Often, the best approach to estate management is proactive.1,2

The new bill has added complexity to the tax code, so I anticipate the IRS will issue guidelines for interpreting the updated rules later this year. Please reach out if you have any questions, and I’ll pass along any information I might have. I would also encourage you to speak with your tax, legal, or accounting professional before making any adjustments based on tax updates in the One Big Beautiful Bill.

1. CNBC.com, July 3, 2025.
2. Congress.gov, August 21, 2025.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

This investment account question is vital and answered as early as possible.

Investment firms have a client service feature that may be a benefit to certain investors. They will ask you whether you would like to provide the name and information of a trusted contact.1

You do not have to supply this information, but it may offer some advantages. The request is made with your best interest in mind – and to lower the risk of someone attempting to make financial decisions on your behalf.1

Why is setting up a trusted contact so important? While no one wants to think ill of someone they know and love, the reality is that there is $3.4 billion worth of suspicious transactions a year related to elder financial exploitation, according to the Financial Crimes Enforcement Network.2

The trusted contact request is a response to this reality. The Financial Industry Regulatory Authority (FINRA) now requires that investment firms make reasonable efforts to acquire the name and contact info of a person you trust. This person is someone that investment firms can contact if they suspect the investor is making an “unusual financial decision” or appears to be suffering a notable cognitive decline.3

Investment firms may put a hold on disbursements of cash or securities from accounts if they suspect the withdrawals or transactions may involve financial exploitation. In such circumstances, they are asked to get in touch with the investor, the trusted contact, and other agencies, if necessary.3

Who should your trusted contact be? At first thought, the answer seems obvious: the person who you trust the most. Yes, that individual may be one of the best choices – but keep some factors in mind.

Ideally, your trusted contact is financially savvy, or at the very least, has some basic financial knowledge. You may trust your spouse, your sibling, or one of your children more than you trust anyone else, but how much does that person know about investing and financial matters?

You should have a high level of confidence that your trusted contact will behave ethically and respect your privacy. This person may be given confidential information about your investments.

It is encouraged that your family members know who your designated trusted contact is. That way, any family member who might be tempted to take advantage of you knows another family member is looking out with your best interest in mind, which may be an effective deterrent to elder financial abuse. It should be noted that the trusted contact may, optionally, be an attorney, a financial professional, or a CPA.3

Your trusted contact is your ally. If you are being exploited financially or could be at risk of such exploitation, that person will be alerted and called to action.

As the old saying goes, money never builds character, it only reveals it. The character of your trusted contact should not waver upon assuming this responsibility.

1. FINRA.org, 2023
2. FinCen.gov, 2023
3. FINRA.org, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.
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