A trust is an entity that establishes a fiduciary relationship where one party, the trustor, gives another party, the trustee, the right to hold assets for the benefit of a third party, the beneficiary, which can be part of an estate or trust. Trusts are formed for various purposes, typically to protect the assets of a living or deceased person.
Filing an income tax return for an estate or trust involves specific forms and regulations to ensure proper reporting and compliance.
There are simple and complex trust funds, and each is taxed differently. Trust funds are typically taxed at much higher rates than individuals. Trust funds must file a fiduciary income tax return, such as Form 1041, to report income, deductions, and credits. Tax deductions are made on the income that the beneficiary receives, including dividend income, so the beneficiary pays taxes on the income (not the trust).
Trusts can claim an income distribution deduction for amounts required to be distributed to beneficiaries, which is reported on Schedule B of Form 1041. The distributable net income of a trust limits the deduction for distributions to beneficiaries and sets the limit on the distribution taxable to the beneficiary.
Understanding all the filing and payments due for a trust fund can be confusing for any one individual. Trust funds are complicated entities and should be handled with the help of an EA or CPA with trust experience. If you are wondering how to set up a trust fund or how to file form 1041 Trust Tax Returns, Las Vegas Torchlight Tax can help.
When you do your 1041 Trust Tax Return with Torchlight Tax, your Trust Tax Return is reviewed by a second tax expert to make sure all is correct, and no tax savings are missed. You also benefit from the fact that Torchlight Tax is one team with a network of offices. Each team member has the purpose to save your tax dollars and make the whole tax experience as pleasant and painless as possible. Different EAS and CPAs have different additional expertise’s in different tax specialties.
An EA holds the highest federal tax credential. A CPA holds the highest state tax credential. This does not mean they know everything. There are millions of words in the tax code, related regulations, court cases, and so on. No one knows it all. If one of our tax pros has a question or is looking for an additional tax saving strategy, he can simply pick up the phone and ask another CPA, EA, or Tax Attorney in the Torchlight Tax Network who may be more trained in a certain specialized field of taxes.
Individual practitioners do not have this option. Just as in sports, a team operating with a common purpose is superior to an individual or group of individuals, even if the individuals are as highly trained. And please note: few tax practitioners are as highly trained and experienced as the Torchlight Tax team.
At Torchlight Tax, your tax return is completed by a licensed EA or CPA. An EA is the highest federal tax credential. A CPA is the highest state credential. Our team is well-versed in the Internal Revenue Code, ensuring that all filings comply with federal regulations.
Another advantage of Torchlight Tax is our team includes administrative support staff who wear their hats in supporting the tax pro. You do not need a highly trained CPA or EA to be filing papers or handling all the incoming robot and sales phone calls. By having administrative support, the EA or CPA is available to handle your questions year-round, saving you money, time, hassle, and worry.
We adhere to the guidelines set by the Internal Revenue Service to ensure accurate and compliant tax returns for estates and trusts.
Also, our support staff typically have accounting degrees, bookkeeping experience, and/or tax preparation experience. We have found people with these backgrounds make the best reception and secretarial staff, as they understand what is going on in a tax practice better than someone with no tax background. It is not unusual for our support staff to be more highly trained than tax preparers who have done prior year tax returns for our new clients. We offer these staff the opportunity to train as an EA or CPA and move up to being tax experts. By giving them grounding in correct administration of tax files and access to EA training, we offer a training and apprenticeship program that creates top tax professionals.
Trusts are typically established to protect assets, and improper tax filing could lead to loss of income and asset protection could be endangered. Whether dealing with a bankruptcy estate or a decedent’s estate, proper tax filing is crucial to avoid penalties.
Trusts must report various types of income, including capital gains, on their tax returns. The EAs and CPAs of Torchlight Tax can be trusted to provide accurate, professional form 1041 Trust Tax Return filings, ensuring all income distributed to beneficiaries is correctly reported. We handle all aspects of income tax for trusts, including calculating taxable income and ensuring compliance with state and federal regulations. Our team ensures that all income taxable to the trust is accurately reported, and we help you understand your tax liability. We also assist with the payment of taxes, ensuring that your tax bill is accurate and all tax credits are applied. For beneficiaries, we provide guidance on how to report income received from the trust on their personal income tax return.
As the leading tax experts in Las Vegas, we can both prepare your Trust taxes and help you plan for next year. To get your Trust Tax questions answered or 1041 filed, contact us today. Free consultations are available.
Call us 1-877-758-7797 or 702-463-1818 or email us at info@TorchlightTax.com. We can transfer your call to a branch office near you or help you directly from our central office.
Many people do not know how a professional tax and accounting firm differs from a bookkeeper or tax preparer. The main difference when working with a professional tax and accounting firm, such as Torchlight Tax, is that our firm utilizes the services of CPAs, EAs, and Attorneys who are distinguished from bookkeepers and other tax preparers by stringent qualification and licensing requirements. Our entire team has a purpose to legally save your tax dollars and to make taxes as painless as possible. This means we take your calls and respond to your concerns. If you receive a threatening IRS call or Notice or are worried about some tax question, we are here for year round taking your calls and responding to your emails.
Whether you are filing personal, small business, or corporate taxes, or negotiating IRS tax debt, if you are not already using a professional Tax, Accounting and IRS Representation firm, you most likely have missed out on major tax benefits. This is because a professional tax and accounting firm utilizes licensed professionals such as Certified Public Accountants (CPAs), EAs and Attorneys, who can not only advise individuals on personal financial matters but who can also advise businesses and corporations of all sizes and types. Tax laws are complicated, and no one knows everything. Torchlight Tax is a team and any one of our tax pros can call on other EAs, CPAs and Tax Attorneys in the team who may have specialist knowledge in a specific area of tax.
When doing current taxes, we often come across missed tax savings from prior years. When this happens, the Internal Revenue Service allows you to amend your taxes and lower your tax liability. Whether you or your prior tax preparer missed a W-2 or 1099, a revised 1099. large charitable donations, or made some other error, amending your tax return can help you recover the money you are rightfully owed. When we find this situation, we will advise you on potential savings and amend the previously filed tax return.</p”>
Sometimes, there may be a situation where a tax return could be amended, but it is too late to receive any benefit. Or maybe you made an error that was missed by the IRS that would have increased your tax liability. In some cases, it is prudent to file an amended return. But if it is not necessary and will not save you any money or decrease your risk, we will tell you not to bother. It is silly to amend a return to no advantage which is too old for the IRS to audit. Some firms might file a bunch of unnecessary tax returns and charge a fee. Sometimes a taxpayer himself might increase his tax liability by filing an unnecessary amendment that increases his tax liability. We will not do this.
Amending a tax return requires more professional acumen then doing it right in the first place. At Torchlight Tax, we do file the tax return correctly the first time. And we will happily amend your tax return, but only if it actually is to your benefit. If you think you might need to amend tax returns, contact Torchlight Tax for a free consultation.
Changed my tax prep to Torchlight and David Horwedel this year. What a pleasant surprise! I have been self-employed for over 30 years and this is the best tax service I've ever had. Goodman, David. Keep up the good work.
My fiancé has been going to David Horwedel for his taxes and I saw last year how well he handled his. So this year, I went to him for mine and I'm so glad I did! He ended up fixing my 2016 year taxes and now I feel I have them accurate with the best return possible.
