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lucky1234
New Member

Hi, I am looking to file taxes for my late father's estate for 2017 tax year. He was a sole proprietor business owner. Is this possible?

If this is possible, should I open a separate turbo tax account?
5 Replies
VolvoGirl
Level 15

Hi, I am looking to file taxes for my late father's estate for 2017 tax year. He was a sole proprietor business owner. Is this possible?

Do you need to do the Estate tax return?  

If you need to file a separate Business return like for a 1065 Partnership or LLC or a 1120 including a Single Member LLC - S corp or a 1041 Estate/Trust return you need Turbo Tax Business.

 

Turbo Tax Business is not available to do online or on a Mac. You can buy the Window version here. And you can have both TT Business and TT Home & Business (or any personal version) installed on your computer at the same time.
https://turbotax.intuit.com/small-business-taxes


Window System Requirements
https://ttlc.intuit.com/community/system-requirements/help/minimum-system-requirements-for-turbotax-...

 

lucky1234
New Member

Hi, I am looking to file taxes for my late father's estate for 2017 tax year. He was a sole proprietor business owner. Is this possible?

My father's business was not a LLC or partnership.  It was a sole proprietorship.  Would the linked version still be applicable? 

 

During this year, his wife was still alive.  Can we file my dad's taxes for this year as married, but filing separately?  

 

rjs
Level 15
Level 15

Hi, I am looking to file taxes for my late father's estate for 2017 tax year. He was a sole proprietor business owner. Is this possible?

In what year did your father pass away?


Are you trying to file your father's personal Form 1040 tax return for 2017, or a Form 1041 income tax return for his estate? The estate is a separate legal entity from your father. The Form 1040 personal tax return covers his income up to the date of his death. The Form 1041 income tax return for his estate covers any income that was received after the date of his death.


A Form 1041 income tax return for an estate does not have a filing status, such as married filing jointly or married filing separately. An estate cannot be married. A Form 1041 income tax return for the estate is different from a Form 706 estate tax return.


Filing tax returns for a deceased person, or for the deceased person's estate, can be complicated. Doing it three years late makes it even harder. You should take a look at IRS Publication 559 for 2017 to get an idea of the issues, but you should probably seek professional help. If you need to file Form 1041 or Form 706 you should definitely get professional help.


If you are filing a final Form 1040 personal tax return for the year that your father died, and his wife was still living in that year, you should file a joint return for your father and his wife. His wife might have already filed a joint return for that year. If so, his tax return was filed. In that case, you do not have to do anything unless the joint return was not correct. If his wife filed with any filing status other than married filing jointly, she would have to amend the return that she filed. If she refuses to cooperate, you would have to file your father's tax return as married filing separately, but his tax will almost surely be higher that way than if he files jointly with his wife.


For a Form 1040 personal tax return, you cannot use TurboTax Online to file for 2017. TurboTax Online is only for the current tax year, which is now 2020. To file for 2017 you have to use the CD or download TurboTax software for 2017. You can purchase a download at the following link.


Past Years' Products for 2017


Tax returns for past years cannot be e-filed. You will have to print your father's 2017 tax return and file it by mail.


To file a Form 1041 income tax return for your father's estate you have to use TurboTax Business for 2017. That's a separate product from the personal software for the Form 1040 tax return. You can purchase a download of TurboTax Business at the same link above. TurboTax Business is available only for Windows. But as I said, if you have to file a Form 1041 return, I strongly recommend that you get professional help and not try to do it yourself.


Income and expenses for the sole proprietorship are reported on Schedule C included in the personal Form 1040 tax return, and in the Form 1041 tax return if there was any business income or expense after the date of death.

 

You cannot file a Form 706 estate tax return with TurboTax.

 

Carl
Level 15

Hi, I am looking to file taxes for my late father's estate for 2017 tax year. He was a sole proprietor business owner. Is this possible?

I would *HIGHLY* recommend you seek professional help with this, for several reasons.

First, you've not really provided enough information for anyone to work with here, so my comments may or may not apply to your situation.

For the 2017 tax return, the filing deadline was Apr 15, 2018. For a business tax return such as a 1065 partnership return the filing deadline was Mar 15, 2018. So if you complete the 2017 tax return and a refund is due, that refund will not be paid. The IRS has a 3-year statute of limitations on refunds, so that's why. However, if an extension was filed prior to the original deadline, then you have until Oct 15 2021 to file the 2017 tax return. (Sep 15, 2021 for a business return) and still get any refund if one is due.

Additionally, for a business tax return there is a late filing penalty of $200 per month per partner, for a maximum of 12 months. So that's a potential $2,400 late filing penalty which would probably wipe out any refund due many times over.

Add to that, if you are the legally recognized or legally appointed administrator of the estate, then it's very possible that you personally would be liable for all late fees, fines and penalties. That could really hurt if state taxes are also involved here.

Now I don't know that all (Or any) of the above would apply here. But those are the possibilities and are the primary reason I'm telling you to RUN as fast as you can to a local CPA or tax attorney with this, and get it done yesterday, if not sooner. If possible, the fees for this (probably minus the fines and penalties) can be paid from the estate. But a tax professional will be able to give you the facts as they apply to your specific and explicit situation.

 

 

Opus 17
Level 15

Hi, I am looking to file taxes for my late father's estate for 2017 tax year. He was a sole proprietor business owner. Is this possible?


@lucky1234 wrote:

My father's business was not a LLC or partnership.  It was a sole proprietorship.  Would the linked version still be applicable? 

 

During this year, his wife was still alive.  Can we file my dad's taxes for this year as married, but filing separately?  

 


Most of the time, spouses file "married filing jointly" and your father's wife would have been allowed to file a joint return the year he died.   If she did, then a return was already filed for your father.  If it was incorrect, then the wife needs to file an amended return.  You can't change a return from "married filing jointly" to "married filing separately" after the original deadline (which was April 15, 2018), and you can't file an amended return for just your father, it has to be an amended joint return signed by the wife. 

 

If the wife filed as married filing separately, or single, or filed jointly with a new spouse, then no 2017 return was filed for your father and you can do that now.  You would file a form 1040 with schedule C for the sole prop for income and activities up to the day he died, and might have to also file a 1041 estate return for income and activities that occurred after the date of his death.  I agree with the recommendation for professional assistance. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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