My father passed away in late march of this year. I did his 2018 Taxes, on Turbo Tax before he passed. They are very simple.His small estate went into probate. My sister and I were listed in his will as sole beneficiary in his will. The probate attorney wants us to file a 1041 (estate tax form) form. Does Turbo Tax Home and Business have the 1041 form? Do I file for 2018 (he was alive the entire year) or 2019 (which has not ended yet)
Filing Form 1041 with TurboTax requires TurboTax Business (not Home & Business) which is only available for the Windows operating system. Form 1041 is an estate income tax return and must be filed for any estate income tax year that the estate receives income of at least $600. The estate can use a fiscal or calendar tax year, established when the estate files its first income tax return.
The end date of the estate's income tax year can be the end of any month withing one year following the date on which the estate receives its first reportable income. If your father died in March 2019, you would not file a 2018 Form 1041 (unless you are filing it for 2019 because the 2019 Form 1041 is not yet available as described below) because the estate did not exist in 2018. Additionally, there is not necessarily a need to file a 2019 Form 1041, but it might make sense to do so depending on how one might want to align the distribution of estate income with the tax returns of the beneficiaries. Depending on when the estate received its first reportable income, the earliest end that that might be required is March 31, 2020. The probate attorney should be able to explain this to the estate's executor or personal representative and provide guidance on choosing an income tax year for the estate. (If not, I would find a different attorney since this should be very basic stuff for an estate attorney.)
If you use a fiscal estate income tax year and the filing deadline is before the IRS issues the updated forms for that year, you use the previous year's forms and modify them for any changes to the tax laws and procedures. See Period Covered: https://www.irs.gov/instructions/i1041#idm140630132069712
TurboTax for 2019 Form 1041 won't be finalized for filing before the beginning of 2020, but if you choose to file a short estate income tax year beginning and ending in 2019, you can use 2018 TurboTax Business to prepare the tax return, making any necessary modifications for tax law changes. (I'm not aware of any at the moment.)
Adding to @dmertz excellent reply, to be able to file a 1041 Estate return, you should apply for an EIN with the IRS -- can do it on line . Also once you get an EIN, it is prudent to file a 1041 ( final ) return to close out the EIN ( even if there was no income ) -- this will retire the EIN.
My father passed in September 2019. The estate had earnings in 2019 and January 2020. The estate was distributed January 30, 2020. The 2020 brokerage tax forms will not be available until mid-February 2021. However, I have all the information I need from the estate's January 31, 2020 brokerage statement. Instead of waiting until after August 31, 2020, the end of the estate's fiscal year, can I manually change the end date of the estate return to January 31, 2020 in TurboTax Business, enter the earnings information from the January 31, 2020 statement, and file the estate return using the 2019 Form 1041? Is there a way to manually change the end date of the estate return in TurboTax Business?
You may use the 2019 Form 1041 to close out the estate if you opt for a fiscal year end. The executor or trustee can opt to use a fiscal year instead. In this case, the tax year would end on the last day of the month preceding the first anniversary of the decedent's death. In most cases, Form 1041 is due to the Internal Revenue Service within four months of the close of the tax year.
The executor or personal representative of an estate must file Form 1041 when a domestic estate has gross income for the tax year of $600 or more, or when one or more of its beneficiaries are nonresident aliens. In this case, the estate would have to file a return even if it earned less than $600.
An estate or trust can use December 31 as its tax year-end date, or it can use any other month as long as that first year does not cover more than 12 months. Most estates begin their tax years on the date of death and end them on December 31 of that year,
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