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Hi,
Doing a 1041 that includes a 1099R with Federal Withholding. Is there any area within the 1041 to allocate that withholding to the beneficiaries of the K-1. I see that dividends and interest are able to be allocated but not with 1099R's or maybe I am not doing it correctly? Is this possible or does the withholding go flow back to the Trust only as a form of a refund? Any help is appreciated.
Thanks
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Just-Lisa-Now-
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I dont think theres a way to allocate withholding to beneficiaries. I tell them to choose NO withholding on distributions, get the full amount, then distribute to the beneficiaries so they can make estimated payments for the income on their returns.
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I ended up putting the withholding in slot 4 of the dividend worksheet by itself, that way I could allocate to beneficiaries through the k-1 on the tax payments page. Not exactly the correct place but at least it's ended up in the right place. Not sure why you can do the same for 1099R withholding.
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Only estimated taxes can be allocated to beneficiaries. And only via an election.
Income tax withholding cannot be allocated to beneficiaries. You can get a refund and then split that up.
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1041-T
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You generally can't allocate regular tax withholding to beneficiaries. It's different for backup withholding and estimated tax payments. See this older discussion with citation:
Still an AllStar
