Executor's Fee

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My wife (who usually takes a loss on her Sch C) received a six figure fee as an Executor for an estate. Is there anything we can do to lessen the tax hit?

Ask the Experts - Tax Due - April 2025

RobertB4444

Alumni - Intuit

Unless your wife has additional expenses associated with earning the income then just retirement plans, really. There were things that she could have done ahead of time - like splitting the fee over a couple of years (assuming the estate even spanned over more than one tax year) or something of that nature. But now that the self-employment income has been received there isn't a ton.

If she opens a SEP retirement account she can contribute 20% of her net profits to it for 2024 as long as she does it before the due date of the tax return. That would result in a reduction of the income tax although it will not reduce the self-employment tax.

Retirement plans are a good idea for reducing your tax bill especially if she isn't covered by one at an employer.

@William767

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