Death & pay't of 4th estimate

[jklcpa]

Client that's 83 y.o. & single died 12/23/07. Her estimates were set up for $800/qtr and would have probably had her overpaid by ~ $150. The executor son called & wanted to know what he should do regarding the taxes.

Estimates were based on her using std ded for '07. Income was just high enough & med exps low enough that std was better than itemized. Only other Sch A would have been a couple hundred in r.e. taxes because she sold her house and almost all was reimbursed at settlement. But then...

In Sept '07 she moved to assisted living and shortly thereafter fell out of a wheelchair in the facility's transport van. The fracture was apparently severe & required hip transplant & rehab at full-care nursing home. (She & wheelchair were not properly secured during transport - lawsuit in the works). While that was happening, she developed some sort of infection that turned life-threatening, was moved back to hospital where she did not recover.

Long story short: I don't know the extent of medical expenses that were actually paid during 2007, and even what portion of the assisted living may be deductible. I believe that 4 mos "rent" was paid, probably at a few thou per mo. The full care nursing/rehab should mostly have been covered by Medicare (or ultimately the lawsuit). Anyway, even if she did owe something, I doubt that it has yet to be billed.

Since the 4th estimate based on breakeven and using the std ded would only be $650, should I tell him to pay this possibly creating an overpay't, or skip it and pay this or poss. smaller balance with the return?

[kcjenkins]

I'd be inclined to tell him not to make the final est payment, since at the worst, the underpayment should be less than the penalty exclusion amount. And there is no reason not to think that in fact, the final return may well have a refund, anyway, given that the Sch A amounts may well be high enough to wipe out all the taxes.

[Jack from Ohio]

I agree with KC.