Far North Tax Service

What is a Fiduciary return?

The death of a family member or loved one is a difficult time for the family of the deceased.

During that time, in addition to arranging for the burial or cremation of a loved one, there a number of legal steps that need to be taken when a person dies. First, as soon as a person dies, they no longer own any possessions, and an estate is created to take ownership and disburse of their possessions in a manner that they wished. This includes real and personal property they owned prior to death, as well as income that they earned prior to death.

Depending on what the person owned and the documented plans that they made prior to death, fiduciary returns may have to be filed for taxes owed on their final income and the estates income. The two types of returns that may have to be filed are an IRS form 1040 for income taxes on the person’s final income and an IRS form 1041 for income taxes on the income generated by the estate.

Understanding when and how to claim income, what forms income it needs to be reported on, and what amounts need to be paid is a complicated process that should be left to someone who has the training and experience to handle those issues so you can focus on your loved ones.

Because of our training and experience with state probate laws and state and federal tax laws, Far North Taxes can process your loved one’s fiduciary returns and ensure that difficult time for you and your family is not punctuated by a deficiency notice from the IRS.