Funeral costs are substantial, and how the issue of taxes might come into play is a frequent question. This will address what can and cannot be done based on the individual and the services.
In Which Cases Are Funeral Costs Not Tax-Deductible?
Funeral costs aren’t tax-deductible for individuals. Any individual, even the ones who personally paid out-of-pocket, will not be able to claim funeral expenses on his or her taxes.
Estates, however, are able to deduct funeral costs from taxes. But this isn’t applicable to every estate. This is only applicable to estates that pay taxes, and in order for an estate to be required to pay taxes, it must have a minimum gross value of $11.58 million.
Tax deduction is not possible for individuals, and it’s only possible for some estates.
When Can Funeral Costs Be Tax-Deductible?
For estates with a gross value of at least $11.58 million, tax-deductibility relies on how the funeral was paid for. If the funeral was paid for with the estate’s funds, then those costs are tax-deductible.
For a funeral that was paid for by anything other than the estate, tax-deductibility does not apply.
What Are Tax-Deductible Expenses?
Tax-deductible expenses are all costs related to the funeral. These costs include cremation, burial plot, casket, embalming, transportation (e.g. hearse and limousine), green burials, minister, tombstone, funeral arrangement costs such as flowers and the staff responsible, and the funeral home facility. These are all directly related to the funeral and can be put on an itemized list for taxes.
What Costs Aren’t Tax-Deductible?
The costs outside the funeral cannot be deducted. For instance, guest travel. If someone takes a flight, then the amount of money paid for the tickets cannot be written off, because travel expenses are not tax-deductible.
If an insurance policy covered the costs, then the funeral expenses cannot be written off either. Only the estate’s payments can be written off.
Call Final Expense Direct at 1-877-674-0236 if you have any further questions.