Trusts and estates often have their own tax return, separate from anyone's personal return. If you've been named a trustee or executor, that can feel like one more thing on a very long list.
We prepare the return, plan around it, and explain it in plain English. Whether you're dealing with an estate after a loss or a trust that's been running for years, we'll keep it simple.
Estate or trust? The difference in plain language
An estate begins when someone dies. It holds that person's property while debts are settled and what's left is passed on. The person in charge is the executor (sometimes called the personal representative). When the work is done, the estate ends.
A trust is an arrangement where one person (the grantor) puts assets in the care of another (the trustee) for the benefit of others (the beneficiaries), under written terms. A trust can start during someone's life or at death, and some run for many years.
Both can earn income, like interest, dividends, rent or gains from selling property, and both may need to file Form 1041. Who pays the tax, the trust or estate itself or the beneficiaries, depends on whether the income stays put or gets paid out.
Who does what
- Executor (estate): gathers the assets, pays debts and taxes, files the final personal return and the estate's return, and passes on what remains.
- Trustee (trust): manages the trust's assets as the document says, and handles tax filings and payouts.
- Beneficiaries: the people who receive income or assets. They may get a Schedule K-1 showing their share of the income, which goes on their own return.
What we do
- Form 1041, the income tax return for a trust or estate
- Schedule K-1s for beneficiaries
- The final personal return for a loved one, when you need it
- Tax planning: how the timing of income and payouts affects who pays the tax
- Bookkeeping for the estate's or trust's income and expenses
What we'll ask you for
- The EIN for the trust or estate, or let us know if you don't have one yet
- A copy of the death certificate (for an estate)
- Details of income received: interest, dividends, rents, sales
- Brokerage and bank statements for the year, including values at the date of death where they apply
- Expenses paid by the estate or trust
- A list of payouts to beneficiaries, with amounts
- Names and addresses of beneficiaries, so we can prepare K-1s
- The last return filed, if any
- Share everything through Intuit Link or SmartVault, not email. Please don't email Social Security numbers or account numbers.
Questions
Does an estate always need a tax return?
Not always. It depends on the amount and type of income and who the beneficiaries are. We'll help you work out whether yours needs one.
Do I need an EIN for the estate or trust?
Usually, yes, if it has income to report. You can apply on the IRS website. Once you have it, we'll tell you what else we need.
I'm a beneficiary and received a K-1. Now what?
Share it with us through the portal along with your other documents, and we'll use it for your personal return.
Can you do my loved one's final tax return?
Yes. Mention it when you request your organizer.
Do you help with the books?
Yes. We can help keep the income and expenses organized so the return is accurate.