The estate pays any taxes due before distributions can be made to heirs. You don't need anything to file your taxes. The only time this would not be true, is if any heirs were given more than the $1 million Gift Exclusion limit on tax-free gifts, in total over the lifetime of the donor. Since this didn't apply to your parents' estate, there's nothing to worry about.

Lots of information on the IRS website. As you know, You have 3 years to claim a tax refund. This is measured from the original deadline of the tax return, plus three years. After that your refund "expires." It goes away forever due to the statute of limitations for claiming a refund. Consequently, as you're aware you've got a few years for which you can no longer claim refunds - although you will still owe any back taxes and penalties for those years. You'll know the outcome and how much, if any, of your 6k you'll get back only after preparing your delinquent returns. A few FYIs... The failure-to-file penalty is calculated based on the time from the deadline of your tax return (including extensions) to the date you actually filed your tax return. The penalty is 5% for each month the tax return is late, up to a total maximum penalty of 25%. The percentage is of the tax due as shown on the tax return. If your tax return is more than five months late, simply multiply your balance due by 25% to calculate your failure to file penalty. The failure-to-pay penalty is calculated based on the amount of tax you owe. The penalty is 0.5% for each month the tax is not paid in full. There is no maximum limit to the failure-to-pay penalty. The penalty is calculated from the original payment deadline (the original April 15th filing deadline) until the balance due is paid in full. Interest is calculated based on how much tax you owe. Interest rates change every three months. The interest is calculated for each day your balance due is not paid in full.

bob_cville brings up an important point which the rest of us had overlooked. As more and more people inherit 401k's and IRAs, it is critical to understand that one needs to make the correct decision in such a case, BEFORE the funds are distributed. For our parents this was not an issue, the grandparents of Boomers didn't have these type of accounts. However, for us and succeeding generations, it is incumbent upon us to be aware not only of the current laws, but any future changes that will made in those laws by Congress. If you are inheriting any portion of an IRA, it's important that you know whether or not the owner was taking distributions. Once distributions are begun, they MUST be continued by the heirs. An IRA passed to multiple heirs may be split in any proportion the owner has specified. The heirs are best served by opening up a new IRA. Titling of this new IRA is very specific to avoid IRS problems. I've excerpted part of a WSJournal article on this issue: "...Inherited IRAs don't work like regular IRAs. If you inherit an IRA from anyone other than your husband or wife, you can't roll it into your own IRA. And you can't consolidate IRAs you inherit from different people into one account. So, if the heir had withdrawn the assets from a parent's IRA and deposited them into her own IRA, she would have undone the inherited IRA, making all its assets taxable. She also would have to remove any assets she deposited in her IRA above her allowed IRA-contribution limit for the year -- $5,000 if she's under 50, or $6,000 if she's 50 or older -- to avoid further penalties. But it appears that the account in question was left as is, except for being improperly titled. Thus, the error should be considered an administrative one that can be fixed. The reader would need to retitle the IRA so it's clear that the owner died and that she is the beneficiary. Ed Slott, an IRA consultant in Rockville Centre, N.Y., recommends using this format: John Smith IRA/ Deceased 1/1/2009/ FBO Mary Smith as beneficiary. (note: FBO means "for the benefit of") Make sure that the financial institution gets the titling right not only on the statements it sends to you, but also on the internal records it uses for reports to the IRS, he says. Some large IRA custodians use the beneficiary's name on the statements sent to him or her, but use the formal titling (as in the "John Smith" example, above) on the information it sends to the IRS to avoid confusing beneficiaries. After you have retitled the inherited IRA, you can stretch out withdrawals from the account across your lifetime, rather than being forced to withdraw the funds sooner. That gives you a chance to extend the time that tax-deferred earnings can accrue, possibly increasing your inheritance."

uhh monica if you go back you will see i did say i could lose 1 day but certainly not 2 weeks worth... i also did say that every $$ coming in goes right out plus another $1000 a month, ea month, for the last 24 months, from savings, to cover what student loans do not cover ea semester. DH only gets $6K a semester, tuition runs $4500, books and CAD program rights another $4-5k, mandatory UCF insurance $250, parking $150... he gets nothing for summer so that another $2500 in tuition, $2K in books... all the shortages go on an interest-free credit card and i pay $1000 a month towards that from savings. savings has not be added to at all since 2007 when DH quit working to finish his honors BS/MS and 2 months later i got my income cut 23%. any refunds we get go straight to savings to replenish the losses. sorry if you think i'm not a good citizen lol because i refuse to take on more financial hardship...i have worked since i was 13, had fulltime employment continuously since the age of 18, moved out on my own at 18, put myself thru 10 yrs of college w/o a single loan or any aid, started a 401K at the age of 19, bought my own house, have no credit card debt of my own (dh has the college debt), buy everything needed for my DH, myself and 2 elderly dogs, pay my utilities and mortgage on time and have never ever even had a parking ticket let alone any other offense. not to mention i will never be a burden to society by collecting social security or medicare, as i was raised to believe there will be no $$ left for my generation (X) and i have planned my whole financial life around that. or maybe it's because i'm the child of a 3rd generation chicago political family that you think i'm not a good citizen lol ;-)) ~ liz