How to File Your Trust Documents With the IRS
A trust is legal entity treated separately from the trustees. When a couple creates an estate trust, they become trustees for the assets that are transferred into the trust. While they no longer own the assets, they control them and the direction of the trust. As soon as the trust is written, paperwork needs to be filed with the IRS so it will be legally recognized and receive a tax identification number (EIN). You don't need to file the trust documents themselves with the IRS, but you do need to obtain an EIN for the trust to be a separate valid entity.
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Instructions
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Compile all the information regarding the trust, including the legal name, address of record and trustee names. The principal trustor must have a valid social security number. Go to IRS.gov and apply for an employer identification number (EIN). Complete Form SS-4 completely and thoroughly and submit it. Applications can be completed online, via fax, phone or by mail.
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File annual taxes if the trust earned more than $600 for the year in income. IRS Form 1041-ES is the estate and trust income tax form.
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Complete a Schedule K-1. Many trusts are at a higher tax rate than the beneficiaries, maxing out at 35 percent in year 2009 if the trust earned more than $11,150. To reduce taxes, a trust distributes the income to beneficiaries instead. The Schedule K-1 accounts for this.
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Tips & Warnings
Contact your secretary of state to determine if you need a state EIN as well. Not all states require this.
Seek the advice of a tax advisor when in doubt about forms, deductions and distributions.
