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Funeral Expenses and Tax Deductions

Funeral Expenses and Tax Deductions


If you’ve recently experienced the passing of a loved one, the last thing you want to be thinking about is money. While it’s important to ensure everything is paid for properly with a funeral, it’s best to have this sort of thing arranged ahead of time so you and other family members can grieve appropriately.


At McDougal Funeral Home, we’re here to help with this and more as part of our advanced funeral planning services. When it comes to funeral expenses, did you realize that there might be a few important tax deductions that can benefit both you and the estate of the departed? Let’s go over these and their basics now to ensure you’re prepared in case it becomes a relevant area in the future.

Medical Bills

In most cases where significant medical services are required for a senior or other loved one who is in the later stages of life, the bills associated with these services will be tax deductible. This is generally the case as long as you’ve been itemizing expenses – in this situation, medical expenses for individuals can be deducted.


Burial and funeral expenses, however, are a bit more complex. We’ll go over these in our next section below.


Funeral Costs

When it comes to funeral costs themselves, including burial and other important areas, the determining factor in whether tax deductions are available is the source of payment for these costs. If they’re paid for by friends, family, or even the departed individual’s account, they will not be deductible – no individual deductions are possible here.


However, if the estate of your loved one is used to pay for these costs, deductions are possible. It’s important to note that not all estates are large enough for taxation, but if it is, funeral and burial costs can be claimed from the estate. Do note, though, that if funeral costs are covered in part or whole by Veteran’s Affairs or Social Security, these contributions cannot be deducted later on.


Claiming Deductions

If the estate of your loved one is large enough to be taxed, chances are you have already consulted a tax preparation professional or accountant. If not, we recommend doing so. This process will involve using Form 706 for US Estate Tax Returns, particularly Schedule J for itemizing expenses that are going to be deducted. Responses will be listed in Section A, Line 1 on this form.


If friends or family help offset the cost, you don’t necessarily have to claim this as you prepare for deductions. The deduction often helps preserve the estate while it supports family members.


For more on tax deductions for funeral and burial costs, or to learn about any of our funeral arrangements, speak to the caring staff at McDougal Funeral Home today.

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