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I do one of these returns every 2 years. So I am flummoxed why the tax rate is so high. I entered the amount on line 8 of the 1041.
This is not a trust and this income is all that it has received since the man's passing in 2021.
The 1099-R is in the name of the estate and not him personally. Even has the correct EIN.
Christopher
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♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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No. The money is still in the Estate's bank account
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Every tax table I read says the rate should be closer to 20%, not 30%..Argh.
What am I missing here:
$1 – $10,000 | 18% | – $0 base tax – 18% on taxable amount |
$10,001 – $20,000 | 20% | – $1,800 base tax – 20% on taxable amount |
$20,001 – $40,000 | 22% | – $3,800 base tax – 22% on taxable amount |
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Estates and Trusts have different rates.
Do you have an Estate or a Trust?
I believe the schedule you posted is for an Estate....
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♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Net Investment Income Tax?
Alternative Minimum Tax?
These also kick in at lower levels of income than for individuals.
Do the computations yourself manually and compare them to the 1041. I doubt the software is wrong.
EDIT: User error is also a possibility.
The more I know the more I don’t know.
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I am sure that it's a user error.
I checked the first box inside of ProSeries indicating Decedent's estate with the DOD.
These monies were paid to the estate by his prior employer after he had passed. Not sure what the monies were for. But the 1099-MISC says "Other Income".
When I do the math, the Estate's tax should be ~$5052 on the $25692 for an effective rate of 19.7%
ProSeries generates Schedule 1, Alternative Minimum Tax-Estates form thou no tax is included from that form. Schedule G on the 1041 shows $7602 on line 1a with no Cross-Reference.
I entered the $25692 on Line 8 of the 1041.
Thanks in advance for your help.
Christopher
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I checked the box on the 1041 indicating "Decendent's estate" with the DOD.