Individual taxpayers can’t deduct funeral or cremation expenses on their federal tax returns, but if the deceased person has an estate worth over $13.99M (for 2025), then the estate can claim deductions for certain costs.
Can you deduct funeral expenses on a personal tax return?
A common question people ask is whether they can deduct funeral costs on their tax returns. Unfortunately, the IRS does not allow individual taxpayers to deduct funeral expenses as personal deductions. Some mistake these costs as medical expenses, but they do not qualify.
Expenses incurred before a person’s passing may be tax deductible medical expenses if they exceed a certain percentage of your adjusted gross income. However, funeral expenses themselves are not tax-deductible on an individual tax return. There may be instances where an estate qualifies for a tax deduction for funeral expenses.
Can an estate deduct funeral expenses on a tax return?
Yes, there are some circumstances where an estate can deduct funeral expenses on a tax return.Executors of estates with values above $13.99M must file IRS form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. This form is used to figure the amount of estate tax that is owed in order to transfer the ownership of the property. If an estate exceeds the $13.99M threshold that requires them to pay estate tax, than funeral expenses paid by the estate are tax deductible for the purposes of calculating the taxable estate.
Even executors of estates below this value sometimes file form 706 in order to lock in the fair market value of assets within the estate. This comes in handy when settling the details of transferring the estate to a spouse, or non-spouse beneficiary.
How do you claim funeral expenses on Form 706?
Form 706, also known as the United States Estate (and Generation-Skipping Transfer) Tax Return, is utilized for reporting the value of the deceased person’s estate to determine if taxes are owed. Even if the value of the estate is below the filing threshold, it’s important to complete Form 706 if you intend to claim deductions for funeral expenses.
To claim the funeral costs, executors should complete Schedule J of Form 706. This is the section where allowable funeral expenses can be recorded. The expenses must be reasonable and directly related to the decedent’s last rites. If you need help gathering the necessary documentation, refer to our tax prep checklist for a comprehensive list of documents you’ll need to complete the form accurately.
What funeral expenses are deductible?
Eligible estates can deduct expenses related to the burial and memorial service, as long as they are directly and reasonably related to the homegoing ceremony. For example:
- Body preparation services including embalming or cremation
- Administrative costs like hiring a funeral director
- Internment of the body in a casket or cremation urn
- Police escort
- Decorative and ceremonial touches like floral arrangements, catering services or musical accompaniment
What funeral expenses cannot be deducted?
If you are filing for an estate that is eligible to claim a tax deduction for funeral expenses, it is important to understand which costs are not deductible. Here are some examples of non-deductible expenses:
- Travel for guests: Any costs incurred by family or friends traveling to the funeral are not deductible. This includes airfare, gas, or lodging expenses.
- Insurance and benefits: Expenses covered by insurance policies or benefits provided by the Veterans Administration (VA) are not deductible. For instance, if a life insurance policy pays for the funeral, the estate or individual can’t deduct those costs.
These non-deductible expenses are considered personal expenses and do not fall under the deductible categories for estate or individual income tax returns.
Does my state allow funeral expense tax deductions?
Certain states require estate taxes, even in scenarios when they are exempt from federal estate tax. These states often have exemption levels much lower than the federal ones so it’s possible, even probable in these states, that IRS form 706 is required to be filed with the state but not the federal government. These states include:
- District of Columbia
- Connecticut
- Hawaii
- Illinois (for 2009 and prior years and 2011 and future years)
- Kansas (for 2009 and prior years)
- Maine
- Maryland
- Massachusetts
- Minnesota
- New York
- Oregon
- Rhode Island
- Vermont
- Washington
