Taxes for the Deceased
Who I help
The death of a loved one brings both grief and great deal of administrative burden, but you don't have to navigate it alone. I will work with the legal representative of the deceased (typically the executor of the will) to ensure that all mandatory tax filings are completed accurately and on time.
Core Services Offered
Beyond settling tax obligations, administering an estate will require you to communicate with legal counsel, financial institutions, creditors and more. As your tax professional, I will primarily work alongside your lawyer and financial advisors to obtain all necessary documentation in order for me to accurately complete all necessary tax filings.
Final Personal Return
As the representative of someone who died, you will need to file a final T1 return for the deceased. This return is referred to as the final return.
The final return is used to report any income and increases in the fair market value of property, investments and belongings up until the date of death, and all credits and deductions the deceased is entitled to claim.
Optional T1 Returns
There are up to 3 types of optional T1 returns that you can file in addition to the final return if you have income from eligible sources and time periods to report.
While optional, filing them may reduce or eliminate tax that you would otherwise have to pay for the deceased. This is possible because you can claim certain credits or deduction amounts more than once, split them between returns, or claim them against specific kinds of income.
Returns for Estate (T3)
Generally, when someone has died, their belongings, property, assets and liabilities form their estate.
An estate may continue to earn investment income or forms of income (e.g., employer death benefit). Generally, a T3 Return is filed if there is any gain realized or payments received by the estate after the death.
Income earned by an estate after the date of death is reported for subsequent years until the estate’s property is fully distributed to beneficiaries.
Clearance Certificate
Having a clearance certificate confirms that an estate of a person who died has paid all amounts of income tax and GST/HST, interest, and penalties it owed at the time the certificate was issued, or that the Minister of National Revenue has accepted security for the payment.
A clearance certificate will allow you, as the legal representative, to distribute assets without the risk of being personally responsible for unpaid amounts the person who died or their estate might owe to the CRA. Your financial institution or lawyers may also ask you for a clearance certificate.
How do I get started?
Getting started is as easy as following the steps below. My top priority is to make the process as easy and straightforward as possible for you, from onboarding to final delivery of the services you requested.
2. Onboarding
Getting set up with DDS Tax Services has never been easier.
Once you've set up an account for my dedicated client portal, you'll be able to chat with me, upload your documents securely, and track the status of your file - all from the comfort of your home.
3. Delivery
Once I receive all of your information, you can leave the rest with me! I will work on your file and let you know once it's finished.
I will then walk you through the final product and answer any of your questions.
Frequently Asked Questions
Here are the answers to some of the more common questions around filing taxes for someone who has died.
When is the final T1 return due?
The final T1 return for the deceased is due the later of: April 30 and six (6) months after the date of death.
If you decide to file one of the optional T1 returns known as the "Return for Rights or Things", the due date is the later of: one (1) year after the date of death and 90 days after the notice of assessment or reassessment for the final return is sent.
What is a Graduated Rate Estate (GRE)?
A GRE, of an individual at any time, is the estate that arose on and as a consequence of the individual’s death, if certain other conditions are met. An estate can only be a GRE for up to 36 months following the death of an individual.
Unlike a regular trust, income earned by a GRE is taxed at lower rates (same rates as an individual), so it is generally beneficial for the estate to designate itself as a GRE.
How long does it take to complete all filings?
This will be highly dependant on the personal circumstances of each person. In some cases, only the final T1 return may be necessary because the deceased did not have many assets. If the deceased had multiple assets, there are disputes among beneficiaries of the will, or there are delays in receiving certain documents, the timeline can be much be longer.
If you would like a clearance certificate, the CRA will take at least 4 months to issue it.
What documents do I need to provide you?
When you first reach out to me, you may not yet be able to obtain all of the documents I require. However, below is a list of the most common documents I will eventually need:
- copy of the will
- a list of all of the assets of the deceased, along with their original cost and fair market value on the date of death
- all T-slips (e.g., T5) of the deceased for the year of death
- copy of the deceased's previous tax return and notice of assessment