Even after death, tax liability does not end automatically. Relatives and heirs must complete the tax affairs of the deceased.
Who has to take care of the tax return?
According to German tax law, heirs assume the tax status of the deceased. You assume all rights and obligations and must submit the tax return for the year of death and, if applicable, for previous years to the tax office.
If it is a community of inheritance, everyone shares responsibility. The heirs must agree on who will actually make the declaration. Heirs can also get support from a tax advisor or income tax assistance association, as tax expert Jörg Leine explains on Finanztip.de. “In the case of a community of inheritance, however, all co-heirs must agree to this,” emphasizes the income tax assistance association Vereinigte Lohnsteuerhilfe eV (VLH).
What income and costs are included in the declaration?
All income of the deceased up to the date of death is recorded in the tax return. These include wages, pensions or investment income. In addition, extraordinary expenses such as medical or nursing costs or even funeral costs can be claimed.
Refunds or additional payments from the tax return also count towards the estate and affect the amount of inheritance tax, as the VLH further explains. In principle, however, the procedure does not differ from a normal tax return. In order not to miss out on any advantages, heirs should collect all relevant documents. This includes, for example, wage and pension certificates, proof of illness or care costs and receipts for funeral costs.
By when do heirs have to submit their tax return?
The deadlines correspond to the usual rules: In principle, the declaration must be submitted by July 31 of the following year. If the heirs commission a tax advisor or income tax assistance association, the deadline is extended until the end of February of the year after next. If the levy is voluntary, this is possible retroactively for up to four years, according to the VLH. However, anyone who receives a request from the tax office must strictly adhere to the deadline, otherwise they will be subject to late payment penalties.
Why is it worth filing a tax return in the event of death?
On the one hand, it is a legal obligation that the heirs must comply with. On the other hand, a declaration can be financially worthwhile: tax refunds increase the discount, while additional payments reduce it. Both in turn influence inheritance tax. In addition, the tax burden can be significantly reduced by offsetting extraordinary burdens, says Leine.
Editorial team finanzen.net