Income Taxes for Estates and Trusts

Estates and trusts are taxed on income they earn, just like individuals. Assets (stocks, bonds, rental property and other interest- and dividend-producing assets) owned by an individual become part of the estate upon their death. Income generated by these assets must be reported to the IRS by the trust or estate. Estates and trusts pay taxes based on rates set by the IRS each year.

Which Estates and Trusts Must File a Form 1041?

The following estates are required to file Form 1041:

  • Estates with gross income of $600 or more for the tax year
  • Estates with a beneficiary who is a nonresident alien

The following trusts are required to file Form 1041:

  • Trusts that have any taxable income at all
  • Trusts that have a gross income of $600 or more regardless of taxable income
  • Trusts with a beneficiary who is a nonresident alien

An estate must obtain a tax ID … Read More

Making Working from Home Work for You

With the onset of the Covid-19 pandemic, many more of us are working from home, and finding it brings new challenges such as having children under foot, creating a workable work space, and avoiding distractions. Here are a few tips to help with these issues.

Children: Set up a desk or desks for each child near your own desk. That way they can complete homework assignments or work on crafts such as coloring while still being nearby. When they aren’t “working” at their desks, you might consider using noise cancelling headphones to help maintain concentration while they play, watch TV, etc.

Workspace: If you are going to be working from home long term, invest in a real desk and some bins or other storage for office supplies. Set up your workspace in a room where you can dedicate either the entire room or a specific measurable portion of the room for … Read More

Need help organizing your financial documents?

If you don’t have a clear idea of how long you need to keep your various financial documents, you’re not alone. Many us of end up keeping everything, and the piles just keeping growing – sometimes at an alarming rate. Here is some guidance to help determine how long to keep your records.

Keep less than a year

  • Retain ATM, bank deposit and credit cards receipts until you reconcile them with your monthly statements. (Then you can shred them unless you need them to support your tax return.)
  • Insurance policies and investments statements should be retained until you receive updated documents.

Keep for a year or longer

  • Retain loan documents until the loan is paid off.
  • Car titles should be retained until you sell the vehicle.
  • For stocks, bonds and mutual funds, keep purchase confirmations so you can establish your cost basis and holding period.

Keep for seven years

  • Keep all
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