Overpayment Application issue

[snowshine]

My client filed MFJ last year with her husband and had the overpayment applied to 2010. He died during the year and his daughter is making life difficult for my client (the wicked stepmother). As a result my client will file as single and the daughter will file a MFS return for the husband. Does the overpayment just get split evenly, and if so, what documentation/substantiation requirements do we need to meet? My client was the principle on the 2009 tax return.

Thanks

Karl

[JCH]

I'm a little confused by the details in your post. Just to be clear on the facts: Your client is the widow. She and her late husband filed MFJ in 2009. He died in 2010. I'm not sure why the daughter's filing status is an issue, or why your client isn't filing MFJ if her husband died in 2010, or why your daughter has a claim on the overpayment of 2009 tax. What exactly do you mean when you say your client was the "principle" on the 2009 return?

[Burke]

Assume you mean your client (widow) was first on the return (primary TP). So the overpayment credited to 2010 is probably under her SSN. Now, apparently there is bad blood between spouse and deceased's children. You can file widow as Single, and daughter can file MFS for the deceased as stated if she is executor or appointed as personal representative of her father's estate. However, single widow will probably get credit in the system for the payment when the return hits the computer, even if she does not show it on the 1040. And when the daughter files the MFS return for deceased, it probably won't apply. If it does, it will be the whole thing. They won't split it on filing. It will take correspondence to straighten this out. Was it all HIS withholding paid in 2009? What makes daughter think she is entitled to refund? She will have to file 1310 and attach court papers as executor or personal representative. If daughter is not executor or personal representative, she has no rights here.

[BOB W]

From what you are saying>> the daughter has no say in anything. The refund is a marital asset and is tied to SS#s on the 2009 return thus goes to the widow on a MFJ return.

I agree with JHC, your post leaves many questions. Single for the wife is NOT an option but can use MFS. But that will just mess up many other issues.

[oceanlovin'ea]

age of couple

If this is an older couple, not filing MFJ will cause their social security to be taxable. This might make a big difference in the return.

I know we don't know all the facts but I think she should go ahead and do a MFJ return and if all the income isn't reported because his daughter has information she is keeping it will be revealed later.
File now and later get a transcript of income for them and correct the return. Does that make sense?

Linda, EA

[luke]

need more info

but it sounds to me like DAUGHTER is Executrix of her Dad's estate? and if so she WOULD have SAY in how his final return is filed! Widow COULD file single (not the recommended status of course but the PROPER one if MFJ NOT available)!
There WILL be a big hassle to try to get any portion of the carryforward of refund from 2009 (esp if daughter files under primary ss# 1st!)

[JCH]

I believe the surviving spouse would choose the filing status, not the executor. Your client could choose Single if she didn't remarry before the end of the year. In this case I believe the deceased would file MFS. However, your client would almost certainly be better filing MFJ. Your client also sounds like she might want to retain an attorney. Things already sound complicated with the step-daughter.

[Burke]

Single for the wife is NOT an option but can use MFS. But that will just mess up many other issues.

She can file as Single if she has not remarried. Oceanlovin' is correct in that filing MFS will probably make the deceased spouse's Social Security fully taxable (85%). Might negate any refund due.

[BP.]

Pub 559- personal rep of estate chooses F/S- not surviving spouse.

[Burke]

I believe the surviving spouse would choose the filing status, not the executor.

Pub 559: Page 4:
Personal representative may revoke joint return election. "A court-appointed personal representative may revoke an election to file a joint return that was previously made by the surviving spouse alone. This is done by filing a separate return for the decedent within one year from the due date of the return including extensions. The joint return made by the surviving spouse will then be regarded as the separate return of that spouse by excluding the decedent's items and refiguring the tax liability."

So the filing issue hinges on whether the daughter is, in fact, the personal representative, executor, or not. However, the right to the estimated tax payment credited from the prior year is more nebulous. It depends on whose funds it came from and who paid it in in the first place.

[JCH]

Pub 559: Page 4:
Personal representative may revoke joint return election. "A court-appointed personal representative may revoke an election to file a joint return that was previously made by the surviving spouse alone. This is done by filing a separate return for the decedent within one year from the due date of the return including extensions. The joint return made by the surviving spouse will then be regarded as the separate return of that spouse by excluding the decedent's items and refiguring the tax liability."

So the filing issue hinges on whether the daughter is, in fact, the personal representative, executor, or not. However, the right to the estimated tax payment credited from the prior year is more nebulous. It depends on whose funds it came from and who paid it in in the first place.

A court-appointed personal rep. is different from an executor. I don't think the poster mentioned whether or not the deceased had a will. (Hopefully he did)

[Burke]

Personal Representative:
A personal representative of an estate is an executor, administrator, or anyone who is in charge of the decedent's property. Pub 969, page. 2.

So an executor would have the same right to rescind. For that reason, if the TP thinks that may happen, I would recommend filing Single, and claim the estimated tax payment.

[JCH]

Personal Representative:
A personal representative of an estate is an executor, administrator, or anyone who is in charge of the decedent's property. Pub 969, page. 2.

So an executor would have the same right to rescind. For that reason, if the TP thinks that may happen, I would recommend filing Single, and claim the estimated tax payment.

They have to be "court appointed" to have that power, and we don't know all the facts, including which state they live in. If the taxpayer died intestate, there might be a court appointed personal rep.

[Burke]

You are correct. My point was, whether it is a court-appointed personal representative or executor, they have the same right to rescind the MFJ return.