U.S. Estate & Trust Income Tax (1041)

Form 1041

Last Updated - March 23, 2024

We designed P1041 specifically for small- to medium-sized law offices, and individuals preparing simple returns for family estates and trusts. Although we sell almost exclusively to the government and legal/tax professionals, this application continues to attract non-professional users. The reasons are simple. P1041 is easy to use, and taxpayers can save hundreds of dollars by preparing their own simple returns.

For most commonly-filed returns, P1041 fits the bill perfectly.

The reality for most law offices is that complicated returns are typically referred to accountants anyway, so why spend more for a program that's designed to handle those types of returns? For non-professionals, why spend hundreds of dollars in preparation fees for estates or trusts that have only interest and dividend income, or modest capital gains.

Who Must File?

The Tax Code requires a fiduciary income tax return to be filed by nearly every estate or trust with a federal identification number. Specifically, the regulations provide as follows:

"The fiduciary (or one of the joint fiduciaries) must file Form 1041 for a domestic estate that has gross income for the tax year of $600 or more."

So, even if you're not handling million dollar estates, it's not hard to find one that meets the filing criteria. At a price of $49.99, P1041 pays for itself as soon as you do your first return, or even more if you're using it to prepare your own return.

Most Law Offices Need NOT File Electronically
NO Individual Filers Must File Electronically

Revenue Procedure 2011-25

.04 Section 301.6011-7(a)(4)(i) provides that an individual income tax return is considered to be filed by a tax return preparer or a specified tax return preparer if the preparer or any member, employee or agent of the preparer or the preparer’s firm submits the tax return to the IRS on the taxpayer’s behalf, either electronically (by e-file or other magnetic media) or in non-electronic or non-magnetic media (paper) form. Submission of a tax return in paper form includes the transmission, sending, mailing, or otherwise delivering of the paper tax return to the IRS by the tax return preparer or the specified tax return preparer, or by any member, employee, or agent of the tax return preparer or the preparer’s firm.

.05 Section 301.6011-7(a)(4)(ii) also provides that an individual income tax return will not be considered to be filed, as defined in § 301.6011-7(a)(4)(i), by a tax return preparer or specified tax return preparer, or the preparer’s firm, if the preparer who prepared the return obtains a hand-signed statement from the taxpayer that states the taxpayer chooses to file the return in paper format and that the taxpayer, and not the preparer, is filing the paper return with the IRS (e.g., submitting it by mail to the IRS). Such statement must be signed by the taxpayer (by either spouse if a joint return) and dated on or before the date the taxpayer files the return. The IRS may provide guidance through forms, instructions or other appropriate guidance regarding how the preparer can document a taxpayer’s choice to file a paper individual income tax return. This revenue procedure provides guidance to preparers and taxpayers regarding how preparers can document a taxpayer’s choice to file an individual income tax return in paper format.

Note: The IRS has held that if the taxpayer physically mails the return, the preparer is not considered to be "filing" the return on the taxpayer's behalf. Consequently, if the preparer gives the completed return to their client to review and mail, this does not count as "filing" the return. IRS Form 8948 (Preparer Explanation for Not Filing Electronically) need only be used if the preparer expects to "file" more than 10 returns; therefore, this form is usually not required if the preparer always has the taxpayer mail the return.

Comprehensive List of Included Forms, Schedules & Worksheets

Forms & Schedules

• Form 1041 U.S. Income Tax for Estates & Trusts
• Schedule A Charitable Deduction
• Schedule B Income Distribution Deduction
• Schedule D Capital Gains and Losses
• Schedule G Tax Computation
• Schedule I Alternate Minimum Tax
• Schedule J Accumulation Distribution for Complex Trust
• Schedule K-1 Beneficiary's Share (multiple copies)
• Form 1041-A U.S. Information Return—Trust Accumulation of Charitable Amounts
• Form 1041-ES Estimated Tax Vouchers
• Form 1041-QFT Income Tax Return for Qualified Funeral Trusts
• Form 1041-T Allocation of Estimated Tax Payments
• Form 8949 - Sales and Other Dispositions of Capital Assets

Worksheets

• Form 1041-ES Estimated Tax
• Schedule D Unrecaptured Section 1250 Gain
• Schedule D Tax Worksheet
• Schedule D Qualified 5-Year Gain
• Schedule D Capital Loss Carryover
• Schedule D 28% Rate Gain

Continuation Schedules

• Form 1041 Line 1 Interest Income
• Form 1041 Line 2a Dividend Income
• Form 1041 Line 15a—Other Deductions Not Subject to 2%
• Form 1041 Line 15b—Other Deductions Subject to 2%
• Form 8949 Short-Term Sales & Other Dispositions ...
• Form 8949 Long-Term Sales & Other Dispositions ...

Miscellaneous

• Complete published IRS Instructions for Form 1041 &
  associated Schedules
• Complete IRS Publication 950—Introduction to Estate & Gift Taxes