Dealing with the death of a loved one is not an easy task, especially when you are in charge of handling the decedent’s funeral and burial arrangements. Besides the time and effort involved, arranging an adequate funeral may result in hefty expenses.
Are funeral costs tax deductible in Florida? Keep reading to find out.
Who is Responsible for Paying a Deceased’s Funeral Costs in Florida? – The Basics
Before determining whether funeral costs are tax deductible in Florida, it is fundamental to identify which party is responsible for paying the funeral costs of a deceased person in Florida.
The decedent’s estate is responsible for paying funeral and burial arrangements, When someone dies in Florida, that person’s will must be submitted in court with a petition for probate.
If the will is valid, the court will appoint an executor to wrap up the deceased’s estate, solve any pending issues, and distribute the remaining assets following the instructions in the will. In such cases, the executor can execute part of the decedent’s assets to pay for:
- Funeral and burial costs
- End-of-life care and medical expenses (if applicable)
- Valid creditors’ claims against the decedent’s estate
- Unpaid taxes
- Administration expenses (e.g., filing fees, accounting fees, etc.)
In many cases, the decedent’s family may decide to pay the funeral arrangements and later file for reimbursement from the estate subject to probate. Funds held in accounts with designated beneficiaries are often used to pay funeral costs, such as retirement accounts or life insurance proceeds.
Are Funeral Costs Tax Deductible in Florida? – Taking a Closer Look
The Internal Revenue Services (IRS) has strict rules for tax deductions involving funeral expenses.
If the family decided to pay the deceased’s funeral bills, they are entitled to reimbursement from the estate. However, individual taxpayers cannot file to deduct funeral expenses on their personal tax returns.
Please note that the IRS has specific rules that permit tax deductions from specific medical expenses. Consult with a Florida tax attorney to identify whether you can claim it on your case.
If you are the executor of an estate and used part of the deceased’s assets to pay funeral costs in Florida, you can claim a deduction for funeral expenses. Each case is different, considering there are estates that waive this deduction.
If the total value of an estate is less than the taxable amount, it does not need a tax deduction. Conversely, executors administering larger or wealthier estates subject to tax can file for different deductions to reduce the estate’s taxable income – including deductions on funeral expenses.
Funeral Tax Deductions and IRS Reimbursement – A Short Overview
If you are administering an estate, you can file for a tax deduction on funeral expenses by filing Schedule J (Funeral Expenses and Expenses Incurred in Administering Property Subject to Claims).
This form is attached with Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. When filling out the forms, it is fundamental to itemize the expenses in detail and provide the total amount of expenses.
If the estate was reimbursed for the decedent’s funeral costs, the executor must deduct the reimbursement from the total expenses before filing Form 706. If you are experiencing hardship in the process, get in touch with an expert Florida attorney.