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From a tax liability perspective, what are the differences…

From a tax liability perspective...
From a tax liability perspective, what are the differences between filing taxes from a trust versus a personal income tax filing ?
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Answered in 8 minutes by:
12/9/2017
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,768
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Hello, my name is ***** ***** I will be able to assist you today.

From a tax stand point the tax brackets and tax rate for a trust are generally higher then for an individual or couple filing married filing jointly.

For example if a trust has income of:

$0- $2,550 = tax rate is 15%

$2,500 - $6,000 The tax rate is 25%

$6,000 to $9,150 then the rate is 28%

For example a tax payer filing single the tax brackets for 2017 start as follow:

$0- $9,325 = 10%

$9,325- $37950 = 15%

$37,950 - $91,900 = 28%

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Customer reply replied 8 months ago
What are the advantages of filing under a Trust IF the income is in excess of $200k either way ?

The advantage would be to protect or keep separate the assets

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Generally, there wouldn't be many (if any) tax savings advantages

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Income in excess of $200K would also be taxed at 39.6% as a trust and as a single tax payer the tax bracket would be:

$91,900 -$191,650 = 28%

$191,650 -$416,700 is taxed at 33%

Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,768
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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