Tax Time’s Trust Tax Preparation
If you have a trust set up to benefit someone in your family, or because you have certain goals when it comes to planning an estate, Tax Time can help work out the details to make sure everything goes smoothly.
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Located in Irvington servicing Newark, Paterson and Irvington
Tax Time Can Help With Trust Taxes
Trusts are an important part of many taxpaying Americans’ financial goals. Usually those goals are about making sure a loved one has money for school, to buy property for themselves, or to invest in their career. They can also be for the person setting up the trust. Trust fund taxes are a fact of life for anyone who sets up a trust fund, and for many people who benefit from one.
Understanding Trust Fund Taxes
A trust is an agreement where one person holds legal title to some property. This person keeps or uses the property on behalf of another person. A trust is formed under state law and any income generated by the use of this property, or interest that collects on it, is subjects to taxes.
A family trust is formed when one member of a family wants to provide for other family members financially, or wants to move ahead with some estate planning goal. Family trusts are also subject to taxes.
Our Tax Advisors Provide Trust Tax Solutions
The taxation process for a trust can be very complicated. Exactly how a family trust gets taxed is dependent on what kind of trust it is. Usually, a trust is either a grantor trust or a non-grantor trust.
- A grantor trust meets at least one of several requirements. The most common requirement that a grantor trust will meet is that the person who created the trust is allowed to take assets back out of trust. This is called a revocable trust. In this situation, the grantor pays taxes on their personal tax return.
- If the grantor can’t take any assets out, then it’s called an irrevocable trust. In this case, the trust has to have its own taxes filed by a tax preparer. This can be the person who set up the trust, and this kind of tax system is usually prepared by a tax professional.
Let Us Help You With Family Trust Distribution
If you’re the beneficiary of a family trust, you most likely have to pay taxes on the benefits you get. Whoever set up the trust for you will need to deduct the amount paid to you off of their own income taxes, and give you a form called a K-1. This will give the Internal Revenue Service information about how to tax your income from the trust. Beneficiaries of family trusts don’t have to pay taxes on the total amount in the trust.
Contact Us Now for Expert Local Trust Tax Preparation Services
Our tax professionals can help you work out the details about how to pay taxes on a trust fund you have set up, or a trust fund that you benefit from. Many of these details are different across different kinds of trusts. For more information, call us now!Contact Us