Individuals
Individual Return – Report income from W-2s, K-1s (from partnerships, S Corps, & trusts), and 1099’s.
Gifts– If you paid a large gift (more than $19,000 for the 2025 tax year). The amounts in excess of this annual exclusion are considered “taxable”, but that really means “it might be taxable”. It is only taxable if the accumulation of all these “taxable” gifts in your lifetime is greater than $13,990,000 (for the 2025 tax year). Most people do not need to pay gift taxes.
Estates
The value of the net assets in the legal possession of a decedent on the date of death is what makes up that decedent’s estate. Generally, if that value is more than $13,990,000 (for the 2025 tax year), less “taxable” gifts, then the Estate must file a tax return to compute and pay estate taxes (Form 706). It is wise to file this tax return for the decedent’s spouse for larger estates even if not required to do so.
If the estate has income generating assets (e.g. rental properties, investments, pensions, etc.), with more than $600 of annual gross income, then the estate must file another tax return to compute and pay income taxes (Form 1041) – to be filed each year.
Trusts
Grantor trusts – a trust where the grantor (creator of the trust) is also the beneficiary – often set up solely to avoid probate. Income generated is claimed directly on the grantor’s individual tax return as if earned directly by the grantor. An informational tax return is optional.
Non-grantor trusts – Much more complex than grantor trusts. Income may be claimed and taxed by either the trust, the beneficiary, or both. If annual gross income is greater than $600, a tax return (Form 1041) must be filed.