A revocable trust does not need to file a separate income tax return. If the trust was irrevocable it would need to file an income tax return.
The IRS considers a revocable trust to be a "disregarded entity" meaning it doesn't exist for tax purposes. Any income that is generated inside the trust - the savings account for example - will be reported to you on a 1099-INT with the name of the trust as the owner but with your Social Security number. You'll simply enter that 1099-INT on your own income tax return, and that's the end of it.
Living trusts serve mainly as probate-avoiding vehicles and are popular for that reason and because no separate income tax reporting is necessary.
Tom Young
