An estate or trust required to file Form 1041 might pass certain items of income and deductions to its beneficiaries. So, if you’re a beneficiary, you must pay tax on your share of income. However, you can also claim credits and deductions on that income.
The estate or trust will send you a Schedule K-1 showing what you must report on your return. The K-1 can include:
- Investment income, like interest, dividends, and capital gains
- Passive income, like rental income
- Deductions to reduce your taxable income
- Credits to reduce your tax
How you report the income depends upon the type of income you’re reporting.
Expats are subject to recent changes under the Tax Cuts and Jobs Act much like any other taxpayer. Read on to learn more about how to prepare in the Tax Information Center.
Get the latest updates on the Protecting Americans from Tax Hikes Act. Learn how the PATH Act may affect your tax refund this year.
If you did not have health care coverage, you may need to calculate your shared responsibility payment when filing your return. Learn more from H&R Block.