IRS Form 1041: Your Estate (or Trust) Has to Pay Taxes Too

The whole point of an estate or a trust is that it becomes  a separate identity when it’s created.  The IRS treats is like it treats a business or an individual taxpayer.  And you know what taxpayers have to do…!  They have to file and pay income tax returns.  So, as your money lives on after you depart this earth and takes on a life of its own as an estate, it will have to pay taxes.  IRS Form 1041 is used to file the tax return for an Estate.  The same form is used to file and pay federal income taxes for trusts.

Who Files IRS Form 1041?

Well usually there is an executor of a will, and that person is the one who takes care of making sure IRS Form 1041 is submitted each year for the estate.  There is almost always a lawyer involved, too, and usually it’s the lawyer who files the form.  Lawyers who specialize in estates are proficient in filing income tax returns for estates.  It’s part of their job.  If the executor is no longer around then there is usually a successor designated in the will, also.  Essentially, it’s the lawyer who sticks around the longest, accompanying the estate form beginning to end.  However, if there’s money involved, you can get the heirs won’t forget about that estate.  But if that happens, there are no heirs and the lawyer goes out of business, then the estate just gets turned over to the State.

Some FAQ’s on IRS Form 1041

  • If the estate has gross income of less than $600 for the tax year, then IRS Form 1041 is not required.
  • One can get an extension of time to file IRS Form 1041.  Fill out and submit Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns
  • The extension of time to file IRS Form 1041 is six months
  • IRS Form 1041 is due April 15, unless the estate operates on a Fiscal Year calendar. Then it’s due the fifteenth day of the fourth month following the close of the fiscal year.