How to handle taxes when filing for a deceased relative - multiple years backlog

I've helped settle several estates and can give you some guidance here. For the state residency question, you should file according to where your uncle actually lived. State B was his legal domicile if that's where his house was located. State tax authorities can be particularly vigilant about residency claims when they involve neighboring states, as this directly affects their tax revenue. Filing incorrectly could potentially trigger audits or penalties. Regarding the refund, you shouldn't use your personal account. The refund belongs to your uncle's estate. The proper procedure is to obtain a Taxpayer Identification Number (TIN) for the estate and open an estate bank account. The IRS will issue the refund to the estate, not to you personally. For your concerns about accuracy - you should make a reasonable effort to locate all financial information. The IRS can match reported income with forms they receive (W-2s, 1099s, etc.). You can request wage and income transcripts from the IRS to see what was reported under his SSN. You should also file Form 56 to notify the IRS that you're acting as the fiduciary.

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One thing nobody mentioned yet - you need to file the returns with "DECEASED" written across the top and the date of death. Also, you should be filing Form 1040 with Form 1310 (Statement of Person Claiming Refund Due a Deceased Taxpayer) if you're not the surviving spouse. For investment accounts, if they were small, you might receive 1099-B forms in the mail in January/February for the tax year. If not, try contacting banks where he had accounts to see if they have records of investment accounts. Many people have small brokerage accounts attached to their checking accounts these days.

Be careful about the state residency issue. My cousin filed for my aunt using the wrong state and ended up with penalties from both states! State B will probably consider your uncle a resident if that's where he actually lived, especially if he had utility bills, a driver's license, or was registered to vote there. If possible, look for these documents to determine his legal domicile: - Driver's license - Voter registration - Utility bills - Property tax statements - Car registration The state where most of these documents point to is likely his legal residence for tax purposes.