How to File Estate Taxes: A Step-by-Step Guide with Deadlines, Forms, and Requirements

Filing estate taxes can feel overwhelming, but with the right guidance, it doesn’t have to be. For Houston homeowners, understanding estate tax requirements is crucial, especially as 2025 approaches with potential changes to tax laws. This step-by-step guide will walk you through the process, including deadlines, required forms, and key requirements, so you can handle estate taxes confidently and efficiently. Whether you’re managing a loved one’s estate or planning ahead, you’ll gain actionable insights to simplify the process.

If you’re considering DIY filing or hiring a law firm, there’s a better option: TaxLasso. It takes just 5 minutes instead of days, costs thousands less than legal services, and gives you full control over your filing. Let’s get started—your peace of mind is worth it.

Determining If You Need to File

The key question is: Do you need to file an estate tax return? The answer depends on the value of the estate and the federal or state thresholds. Here’s how to determine if filing is necessary:

Federal Estate Tax Threshold

• For 2025, the federal estate tax exemption is projected to be $6.8 million per individual (adjusted for inflation).
• If the estate’s total value exceeds this amount, you must file IRS Form 706.
• For married couples, portability allows the unused exemption of one spouse to transfer to the surviving spouse, effectively doubling the threshold to $13.6 million.

Texas Estate Tax Considerations

• Texas does not have a state estate tax, so Houston homeowners only need to consider federal requirements.
• However, property valuations can impact the estate’s total value. If your Houston home has appreciated significantly, it could push the estate over the federal threshold.

When to File

• File if the estate’s gross value exceeds the federal exemption.
• File to claim portability for a surviving spouse, even if the estate is below the threshold.
• File if the estate includes complex assets like businesses, out-of-state properties, or large investments.

Property Valuation Challenges

Accurate property valuations are critical. Overvalued homes can unnecessarily trigger estate tax filing requirements. If you’re unsure about your home’s valuation, consider using TaxLasso to quickly and accurately assess your property’s value. Unlike DIY methods, which can take hours, TaxLasso provides professional-level insights in just 5 minutes. Compared to hiring a legal firm, TaxLasso saves thousands of dollars while giving you full control over the process.

By understanding these thresholds and leveraging tools like TaxLasso, Houston homeowners can confidently determine if they need to file and avoid unnecessary costs or complications.

Estate Tax Deadlines

The estate tax filing deadline is 9 months after the date of death. If the deceased passed away in 2024, the deadline would typically fall in 2025. Missing this deadline can result in penalties and interest, so it’s critical to act promptly.

Key Deadlines and Extensions

• Primary Deadline: File Form 706 (Estate Tax Return) within 9 months of the date of death.
• Extension Option: You can request a 6-month extension by filing Form 4768, but any taxes owed must still be paid by the original deadline to avoid penalties.
• Payment Deadlines: Estate taxes are due at the same time as the filing deadline.

Special Considerations for Houston Homeowners

• Property Valuations: If the estate includes real estate, ensure property valuations are accurate. Overvalued properties can lead to higher estate taxes.
• Tax Protests: If you believe your property valuation is incorrect, you can protest it. However, this process can be time-consuming and complex.

How TaxLasso Can Help

Navigating estate tax deadlines and property valuations can be overwhelming. TaxLasso simplifies the process:

• Save Time: Instead of spending hours on DIY research, TaxLasso provides professional-level insights in just 5 minutes.
• Save Money: Compared to hiring legal firms, TaxLasso saves you thousands of dollars while giving you full control over the process.
• Expert Guidance: Get accurate property valuations and actionable advice to ensure your estate tax filing is error-free and optimized.

Take Action Now

Don’t wait until the last minute. Start preparing your estate tax filing today to avoid penalties and ensure compliance. If you need help with property valuations or tax protests, TaxLasso offers an affordable, efficient solution tailored for Houston homeowners.

Required Forms & Documents

When filing estate taxes in Houston, the required forms and documents depend on the estate's value and the type of assets involved. For 2025, estates exceeding the federal exemption limit of $13.61 million (or $27.22 million for married couples) must file Form 706 (United States Estate Tax Return). Below is a breakdown of what you’ll need:

Key Documents to Gather

• Decedent’s Information: Death certificate, Social Security number, and will or trust documents.
• Asset Valuations: Appraisals for real estate (e.g., Houston homes), stocks, business interests, and personal property.
• Debts and Expenses: Documentation of mortgages, loans, funeral costs, and administrative expenses.
• Gift Records: Details of any taxable gifts made during the decedent’s lifetime.

Property Tax Challenges in Houston

Houston homeowners often face challenges with property valuations, which can impact estate tax calculations. If you believe your property’s valuation is inaccurate, you can file a property tax protest. However, this process can be time-consuming and complex.

How TaxLasso Simplifies the Process

Instead of spending hours navigating DIY property tax protests or paying thousands for legal firms, TaxLasso offers a superior alternative. TaxLasso:

• Takes just 5 minutes to submit a protest, saving you hours of effort.
• Provides professional-level insights without the high cost of legal services.
• Gives you full control over the process while ensuring expert guidance.

By streamlining the protest process, TaxLasso ensures your property valuation is accurate, which can directly reduce your estate tax burden.

Next Steps

1. Gather all required forms and documents.
2. Review property valuations and consider protesting if necessary.
3. Use TaxLasso to save time and money while ensuring accuracy.

Taking these steps now can help Houston homeowners avoid costly mistakes and maximize their estate’s value.

Calculating Estate Tax Liability

Estate tax liability is the amount your estate may owe to the federal government after your death. For Houston homeowners, understanding how to calculate this liability is critical to avoid unexpected costs and ensure your heirs receive the maximum inheritance.

Key Steps to Calculate Estate Tax Liability

1. Determine Your Gross Estate Value
   Add up the total value of all assets, including your home, investments, retirement accounts, and personal property. For example, if your Houston home is valued at $500,000 and you have $300,000 in other assets, your gross estate is $800,000.

2. Subtract Allowable Deductions
   Deduct debts, mortgages, funeral expenses, and charitable donations. If you owe $200,000 on your mortgage, your taxable estate reduces to $600,000.

3. Apply the Federal Estate Tax Exemption
   In 2025, the federal estate tax exemption is projected to be $6.8 million per individual ($13.6 million for married couples). If your taxable estate is below this threshold, you owe no federal estate tax.

4. Calculate the Tax Rate
   Estates exceeding the exemption are taxed at a rate of 40%. For example, a $7 million estate would owe $80,000 in taxes ($7M - $6.8M = $200,000 x 40%).

How TaxLasso Can Help

If you're concerned about property valuations impacting your estate tax liability, TaxLasso simplifies the process. TaxLasso helps Houston homeowners:

• Accurately assess property values in minutes, ensuring your estate calculations are precise.
• Save thousands compared to legal firms while maintaining professional-level accuracy.
• Avoid the time-consuming DIY approach—complete your valuation in just 5 minutes.

By using TaxLasso, you can confidently calculate your estate tax liability and take proactive steps to protect your legacy.

State vs Federal Requirements

When it comes to estate tax filing, Houston homeowners must navigate both state and federal requirements. The key difference is that Texas does not impose a state estate tax, but federal estate taxes may still apply depending on the estate's value. Here’s what you need to know:

Federal Estate Tax Requirements

• Exemption Threshold: In 2025, the federal estate tax exemption is projected to be $6.8 million per individual ($13.6 million for married couples). Estates below this threshold are not subject to federal estate taxes.
• Filing Deadline: If federal estate taxes apply, the estate must file IRS Form 706 within 9 months of the decedent’s death, with a possible 6-month extension.
• Tax Rate: Estates exceeding the exemption are taxed at a rate of 40% on the excess amount.

Texas Estate Tax Requirements

• No State Estate Tax: Texas is one of 38 states without a state estate tax, simplifying the process for Houston homeowners.
• Inheritance Tax: Texas also does not impose an inheritance tax, meaning beneficiaries typically receive assets tax-free.

Property Tax Considerations

While estate taxes may not apply to most Houston homeowners, property tax valuations can still impact estate planning. If the estate includes real estate, heirs may face higher property taxes due to reassessment. To address this:

• Protest Property Valuations: Heirs can protest unfair property tax assessments to reduce their tax burden. Tools like TaxLasso make this process quick and efficient, taking just 5 minutes to file a protest with professional-level insights.
• DIY vs Professional Help: While DIY property tax protests can take hours, and legal firms charge thousands, TaxLasso offers an affordable, time-saving alternative that delivers expert results without the high cost.

By understanding these requirements and leveraging tools like TaxLasso, Houston homeowners can efficiently manage estate tax obligations and protect their heirs from unnecessary financial burdens.

When to Hire a Professional

Hire a professional for estate tax filing when the estate exceeds the federal exemption limit ($12.92 million in 2023, projected to drop to around $6.5 million in 2025) or when complex assets like Houston real estate, business interests, or out-of-state properties are involved. Professionals ensure compliance, maximize deductions, and minimize tax liabilities.

Key Situations to Consider Professional Help

• High-Value Estates: If the estate exceeds the federal exemption limit, professional guidance is critical to avoid costly errors.
• Complex Assets: Estates with multiple properties, rental income, or business holdings require expert valuation and tax strategies.
• Property Tax Challenges: If the estate includes Houston real estate with disputed valuations or high property taxes, professionals can help protest assessments effectively.
• Time Constraints: Estate tax filing deadlines are strict. Professionals ensure timely, accurate submissions.

Why TaxLasso is the Ideal Solution

For Houston homeowners facing property tax challenges, TaxLasso offers a superior alternative to DIY or legal firms:

• DIY Comparison: TaxLasso takes just 5 minutes to file a property tax protest, saving hours of research and paperwork while delivering professional-level insights.
• Legal Firm Comparison: Save thousands of dollars compared to hiring a legal firm, while maintaining full control over the process.
• Middle Ground: TaxLasso combines the affordability and simplicity of DIY with the expertise and results of professional services.

Take Action Now

If your estate includes Houston real estate or exceeds exemption limits, don’t risk costly mistakes. Use TaxLasso to streamline property tax protests and ensure your estate tax filing is handled efficiently and affordably.

Avoiding Common Mistakes

Estate tax filing can be complex, and even small errors can lead to costly penalties or missed savings. Here’s how Houston homeowners can avoid the most common mistakes:

1. Underestimating Property Valuations

One of the biggest mistakes is undervaluing or overvaluing property. For 2025, the federal estate tax exemption is projected to be $6.94 million per individual, but Texas homeowners must also consider local property tax valuations. Overestimating your property’s value could lead to higher estate taxes, while underestimating could trigger an IRS audit.

• Solution: Use tools like TaxLasso to get an accurate, professional-level property valuation in just 5 minutes. This ensures you’re neither overpaying nor risking penalties.

2. Missing Deadlines

Estate tax returns (Form 706) are due nine months after the decedent’s death, with a six-month extension available. Missing this deadline can result in penalties of up to 5% per month on unpaid taxes.

• Solution: Set reminders and gather all necessary documents early. If you’re unsure about deadlines, consult a professional or use a streamlined service like TaxLasso to stay on track.

3. Overlooking Deductions and Exemptions

Many homeowners miss out on deductions like charitable contributions or the marital deduction, which can significantly reduce taxable estate value.

• Solution: Review IRS guidelines or use a service like TaxLasso to identify all applicable deductions. Unlike DIY approaches, TaxLasso provides expert-level insights without the hours of research.

4. DIY vs. Professional Services

While DIY filing might seem cost-effective, it often leads to errors. Legal firms, on the other hand, can charge thousands of dollars.

• Solution: TaxLasso offers the perfect middle ground—affordable, fast (just 5 minutes), and professional-grade results. It’s thousands of dollars cheaper than legal firms and gives you full control over the process.

By avoiding these common mistakes, Houston homeowners can save time, money, and stress while ensuring compliance with estate tax laws.

Filing Process Walkthrough

Filing estate taxes can feel overwhelming, but breaking it down into clear steps makes it manageable. Here’s a straightforward walkthrough to help Houston homeowners navigate the process efficiently:

1. Gather Required Documents

• Key Items Needed: Death certificate, will, property deeds, bank statements, and appraisals for real estate (e.g., Houston homes).
• Deadline: For 2025, estate tax returns (Form 706) are due within 9 months of the decedent’s passing, with a 6-month extension available.

2. Determine the Estate’s Value

• Property Valuation: Houston homeowners must assess the fair market value of real estate as of the date of death. This is critical for estates exceeding the 2025 federal exemption limit of $6.94 million per individual.
• Challenges: Property valuations can be complex, especially in Houston’s fluctuating market. Overvaluations can lead to higher taxes, while undervaluations risk penalties.

3. File the Estate Tax Return

• DIY Option: Homeowners can file independently, but this often takes hours of research and paperwork.
• Professional Help: Legal firms charge thousands but ensure accuracy.
• TaxLasso Alternative: TaxLasso simplifies the process in just 5 minutes, offering professional-level insights without the high cost.

4. Address Property Tax Challenges

• Protest Overvaluations: If the estate includes Houston real estate, consider protesting inflated property tax valuations.
• How TaxLasso Helps: TaxLasso streamlines property tax protests, saving homeowners time and money while maximizing savings.

5. Pay Any Taxes Owed

• Payment Deadline: Taxes must be paid by the filing deadline to avoid penalties.
• Installment Plans: Estates with illiquid assets (e.g., real estate) may qualify for installment payments under IRS Section 6166.

By following this walkthrough, Houston homeowners can tackle estate tax filing confidently. For a faster, more affordable solution, TaxLasso offers the perfect balance of expertise and control, saving you time and money.

Post-Filing Considerations

After filing your estate tax return, there are several critical steps to ensure compliance and maximize savings. Here’s what you need to know:

1. Review Property Valuations for Accuracy

The IRS may audit estate tax returns, and property valuations are a common focus. If your Houston home was appraised at $500,000 but its market value is closer to $450,000, you could face unnecessary tax liabilities.

• Action Step: Reassess your property valuation post-filing. If discrepancies exist, consider filing an amended return or protesting your property tax assessment.

2. Monitor Property Tax Assessments

Texas property tax rates are among the highest in the nation, and Houston homeowners often face rising valuations. For example, Harris County saw a 10% average increase in home values in 2023.

• Action Step: File a property tax protest if your home’s assessed value exceeds market value. This can save you hundreds or even thousands annually.

3. Plan for 2025 Estate Tax Changes

The federal estate tax exemption is set to drop from $13.61 million (2024) to approximately $6.8 million in 2025. If your estate is close to this threshold, consult a tax professional to explore strategies like gifting or trusts.

4. Leverage Tools Like TaxLasso for Efficiency

Filing a property tax protest or reassessing valuations can be time-consuming and complex. TaxLasso simplifies this process, offering professional-level insights in just 5 minutes—far faster than DIY methods. Compared to hiring a legal firm, TaxLasso saves thousands of dollars while giving you full control over your case. It’s the ideal middle ground for Houston homeowners seeking affordability, expertise, and convenience.

By addressing these post-filing considerations, you can protect your estate, reduce tax burdens, and ensure compliance with evolving regulations.

Conclusion

Filing estate taxes doesn’t have to be overwhelming. Start by gathering key documents like IRS Form 706 and understanding the 2025 deadlines to avoid penalties. For Houston homeowners, the next step is to assess your estate’s value and determine if filing is required. If you’re looking for a streamlined, cost-effective solution, TaxLasso offers the perfect middle ground—combining the ease of DIY with professional expertise, saving you time and thousands compared to legal firms. Take action today to ensure your estate taxes are filed accurately and on time.