The final individual income tax return of a decedent is prepared and filed in the same manner as when they were alive. All income up to the date of death must be reported and all credits and deductions to which the decedent is entitled may be claimed. If the taxpayer was married, the widow or widower may file a joint return for the year of death. If the decedent is due a refund, you may claim that refund using Form 1310.
Traditional IRAs and 401(k)s are taxed to the heir. No taxes are due on inherited Roth IRAs and 401(k)s, as long as the account had been open at least five years at the time of the owner’s death.