Form 4421: Executor’s Commissions and Attorney’s Fees Deduction

Form 4421 is a one-page IRS declaration, filed as an attachment to Form 706, in which the executor swears to the executor commissions and attorney fees the estate intends to deduct when those amounts haven’t yet been paid, fixed by agreement, or approved by a probate court. Because Form 706 itself is only required when the gross estate exceeds $15,000,000 in 2026, Form 4421 comes up only for estates large enough to owe federal estate tax.¹

When You Actually Need It

Not every Form 706 filer needs to attach a Form 4421. You need it only when the estate is claiming a Schedule J deduction for executor commissions or attorney fees that have not yet been fully paid, fixed by agreement, or approved by a court at the time the return goes in.² That situation is common. Form 706 is due nine months after death, and estate administration routinely runs longer than that.

The Treasury regulations let you deduct estimated fees that are “ascertainable with reasonable certainty” and will be paid, but they don’t tolerate vague or speculative numbers.³ Form 4421 is how you back up the estimate with a sworn declaration. If every dollar of fees is already paid by the time you file, you can put the amounts on Schedule J without Form 4421.

Decide First: Estate Tax Deduction or Income Tax Deduction

Before touching the form, make a decision. The same administration expenses cannot be deducted on both Form 706 and the estate’s income tax return, Form 1041.⁴ Form 4421 asks you to affirm that the amounts declared won’t also be claimed on the income side.

The choice has real money behind it. Estate tax deductions reduce the taxable estate at the 40% estate tax rate, while income tax deductions reduce the estate’s Form 1041 taxable income at whatever marginal rate applies. For large estates producing significant income during administration, it’s worth running both scenarios. You can also split the fees, deducting part on Form 706 and part on Form 1041, provided you file the proper waiver statement with the income tax return for whatever portion you shift.⁵

Form 4421 has a dedicated line for reporting the portion of total fees that will instead be deducted for income tax purposes.² Getting the allocation right upfront avoids amended returns later.

How Much You Can Actually Deduct

The IRS will not accept whatever number the executor chooses to write down. Executor commissions are deductible only to the extent they fall within “usually accepted standards and practice” for estates of similar size in the jurisdiction where administration takes place. If the will fixes the executor’s compensation at a specific amount, the deduction is capped at what local law would otherwise allow.⁶ Anything above the local standard has to be justified independently.

Attorney fees are evaluated on similar grounds: size and character of the estate, local practice, and the skill the work required. Even fees a probate court has approved as payable by the estate can be disallowed if the underlying legal work wasn’t essential to settling the estate.⁶ State commission rules vary considerably, and many states use percentage-based sliding scales tied to estate value. Check your state’s rule before you commit to a number on the form.

What to Have Ready

Before filling in the form, pull together:

The decedent’s full legal name, date of death, and Social Security number, matching Form 706 exactly.
The total executor commissions and total attorney fees, whether paid or expected.
For each payee, the name, address, Social Security number, payment date (or expected date), and dollar amount.
The dollar amount, if any, that will be claimed as an income tax deduction on Form 1041 rather than on Form 706.

If there are multiple co-executors or more than one attorney, each gets a separate line entry.

Filling Out the Form

Form 4421 is a single page. Start with the estate identification block at the top: decedent’s name and date of death. The body of the form is a perjury declaration where you enter the total commissions and total attorney fees agreed upon.

Below the declaration, a table captures each recipient’s Social Security number, name, address, payment date, and payment amount. For fees not yet paid, use the expected payment date and estimated amount. Estimates need to be grounded in something concrete: an engagement letter, a fee agreement, or the applicable state commission schedule.

The line near the bottom asks how much of the total commissions or fees will be claimed as an income tax deduction instead. Enter zero if the estate is deducting everything on Form 706. The amounts declared here need to match the figures on Schedule J of Form 706.² Schedule J itself requires you to label each amount as “estimated,” “agreed upon,” or “paid.”⁷

The executor, or all co-executors, must sign and date the form. The signature is under penalties of perjury, and the declaration commits you to two things: that the fees will actually be paid, and that the recipients will report the payments as income on their own returns for the year they receive them.

Filing With Form 706

Form 4421 is not filed on its own. It goes in as an attachment to Form 706, supporting the administration expense deductions on Schedule J. The Form 706 package is mailed to the Department of the Treasury, Internal Revenue Service, Kansas City, MO 64999.

The deadline is the Form 706 deadline: nine months after the decedent’s date of death.⁸ Filing Form 4768 before that date gets you an automatic six-month extension.⁹ The extension covers the return and every attachment, Form 4421 included.

If the Fees Change After You File

The form addresses this on its face. If the amounts or payment dates change, or you later decide to shift fees from an estate tax deduction to an income tax deduction, you have to notify the IRS and pay any additional estate tax that results.²

If the final fees are higher than what you deducted, you can file a claim for refund to recover the additional tax, as long as the higher amount still meets the reasonableness rules. If the final fees are lower, the estate owes more tax than it paid, and filing a supplemental Form 706 to correct the figures is cleaner than waiting for an audit. Supplemental returns go to a different address: Internal Revenue Service Center, Attn: E&G, Stop 824G, 7940 Kentucky Drive, Florence, KY 41042-2915.

An estate can also file a protective claim for refund on Schedule PC of Form 706 when an expense isn’t currently deductible but might become so later.⁷ That preserves the right to claim the deduction later without losing it to the statute of limitations on the original return.

1
Internal Revenue Service. Frequently Asked Questions on Estate Taxes
2
Internal Revenue Service. Form 4421 – Declaration Executor’s Commissions and Attorney’s Fees
3
eCFR. 26 CFR 20.2053-1 – Deductions for Expenses, Indebtedness, and Taxes
4
Office of the Law Revision Counsel. 26 USC 642 – Special Rules for Credits and Deductions
5
Internal Revenue Service. IRS Publication 559 – Survivors, Executors, and Administrators
6
eCFR. 26 CFR 20.2053-3 – Deduction for Expenses of Administering Estate
7
Internal Revenue Service. Schedule J (Form 706) – Funeral Expenses and Expenses Incurred in Administering Property Subject to Claims
8
Internal Revenue Service. Instructions for Form 4768 – Application for Extension of Time To File a Return and/or Pay U.S. Estate Taxes
9
eCFR. 26 CFR 20.6081-1 – Extension of Time for Filing the Return