If you filed final taxes for a decedent and later received a 1099, you must amend the final returns. To include the missing income on the final federal return, you must file form 1040X. For final state returns, if required, states allow you to amend returns online. So, refer to your state taxing authority for guidance on amending returns.

In addition to amending the returns, you may also have to adjust the 1099. Typically, payers of 1099 income report income earned for the entire year. Additionally, income reported on the final returns consists only of income earned during the final year of life up until the date of death. Therefore, income on the 1099 needs adjusting to determine the amount to report on the final amended returns as explained in the article How to Report 1099 Income on the Final Return.

However, amending final returns and adjusting 1099’s should be painless. The executor should already be tracking income of the estate on all accounts. So, contact the executor for the amount of income on the 1099 to report on the final returns. If you are the executor using a tax professional, forward the 1099 with the income adjustment.

Haven’t Received a 1099? You don’t need it.

If you are preparing the final tax returns for a decedent while missing a 1099, don’t worry, it’s not necessary. The IRS doesn’t require taxpayers to attach 1099’s to their returns. So, if you haven’t received a 1099 that you were expecting by early February, and you know the amount of income to report on the final returns, report the income on the final returns and contact the issuer. While talking to the issuer, ask for a duplicate 1099 even if they tell you it’s in the mail.

Conversely, if you don’t know the amount of income to report on the final returns, do the following:

1. Call the issuer and ask for the income information over the phone.
2. Look online as most issuers will allow access to executors regarding account information such as statements and tax information. If you are not an executor but preparing the final taxes, ask the executor to gather this information online.
3. Check the bank statements and brokerage statements you already have at your disposal.

After accumulating the total income for the year for the account in question, report only the amount of income needed for the final returns.

Moreover, you can use the compiled income to compare against the 1099. So, if you filed the final returns and the missing 1099 arrives late, compare the total amount of income you compiled to the total amount on the 1099. If there is a difference, you may have to amend the final returns if you can’t resolve the discrepancy with the issuer. Otherwise, the final returns are complete.

The Best Chance to Avoid Filing Amended Returns

The best option to avoid having to amend final returns is not to file early. Instead, if you are an executor using a tax professional, hold off signing the returns until the deadline is near. Even if you are not an executor, but preparing the final returns, hold off having the executor sign the returns. By waiting near the deadline, you will give yourself time to change the returns if the income originally reported changed. As a result, you improve your chances of avoiding amended returns by fixing the problem before filing the final returns.

Was this article helpful? Do you understand the need to adjust 1099 income reported on final returns? Can you think of other ways to avoid the need to file amended final returns? Share your thoughts or questions in the comment area below.

Reference

IRS Publication 559 – Survivors, Executors, and Administrators

Recommended Reading

Track the Estate Income – This article will go into more detail about the importance of tracking the estate income.

The Executor’s Guide– The Executor’s Guide will help an executor or future executor navigate through an estate administration.