Direct Cremate

Are Funeral Expenses Tax Deductible?

Can you get a tax credit or deduction for funeral expenses? Find out what taxes are involved after someone dies with or without an estate.
Can You Deduct Funeral Expenses on Your Taxes?
Can You Deduct Funeral Expenses on Your Taxes?

As more people pre-arrange funeral services and pay fees in advance, it’s brought up a whole new dialogue about disposition costs. Some of the most common questions are about taxes, namely if you can deduct some of those expenses or perhaps get a tax credit.

There’s no denying that even affordable direct cremation is a major expense for many families. In actuality, paying for funeral services is hard for many people and only gets more difficult with each year as the prices increase. We understand why people want to know if they can get some of that money back during tax season. After all, Benjamin Franklin once famously said, “in this world, nothing is certain except taxes and death.”

Are There Tax Credits or Deductions for Funeral Expenses? 

In the vast majority of cases, funeral expenses are not tax deductible and you can not receive a tax credit. This is the case if the person who paid the funeral expenses is filing their taxes as an individual. 

However, if a person plans ahead and sets up an estate then the funeral expenses may be tax deductible. But the deductions only apply if the estate is worth more than $13,610,000. Even then not every funeral expense will qualify for a deduction and the expense has to be reasonable. 

If funeral expenses appear to be too expensive there are benefit programs that could help. Social Security and the Department of Veterans Affairs both offer assistance paying for funeral services

There’s also something called final expense insurance. It’s essentially life insurance but for lower benefit amounts and the proceeds are strictly used to pay for funeral expenses. Because it’s easier to qualify for, final expense insurance is a great solution if you can’t get life insurance. 

Are There Other Tax Considerations if a Loved One Dies?

You may not get a tax credit or a deduction, but there could be other tax considerations when a loved one dies. Such as, if you’re the executor of someone’s will you have to file their taxes for that year. 

You might also have to prepare an estate tax return. Most families don’t have to worry about this extra tax return. It’s only required if the estate was worth more than $12,920,000 in 2023 ($13,610,000 in 2024).

And if you’re a beneficiary there could be other tax implications, namely an inheritance tax. There’s no federal inheritance tax, but there is at the state level in Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania as well as Iowa until the end of 2024.

At Direct Cremate we keep cremation straightforward and simple. We know there’s a lot to process and a lot to get done after a loved one passes. Our services give you the ability to handle it all without feeling overwhelmed. Give us a call or text to discuss cremation options.