Atlanta, Georgia – With the April 15th income tax deadline approaching, Slowik Estate Planning in Atlanta is urging Georgia trustees and families with trusts to review whether trust earnings are taxable and what returns must be filed this season.
Estate planning attorney Jake Slowik said many Atlanta families assume that placing assets in a trust automatically shelters income from taxation or eliminates filing obligations, an assumption that can lead to penalties and interest when returns are missed.
“People are often surprised to learn that, in many cases, trust income is fully taxable and must be reported on a separate federal return,” Slowik said. “If trustees wait until the last minute to sort out whether their trust is a grantor or non-grantor trust, they risk filing late or filing incorrectly.”
For tax purposes, revocable living trusts are commonly treated as grantor trusts. In those cases, all income is reported on the grantor’s personal Form 1040, and the trust does not file its own federal income tax return while the grantor is alive and in control.
By contrast, non-grantor trusts are separate taxpayers. They generally must file Form 1041 if they have any taxable income or at least $600 in gross income for the year. The trust pays income tax on amounts it retains, while income distributed to beneficiaries is deducted by the trust and reported to beneficiaries on Schedule K‑1.
“The federal income tax brackets for trusts are compressed,” Slowik said. “In 2026, a non-grantor trust can reach the top 37 percent bracket after only about $16,000 of taxable income, compared with more than $640,000 for an individual. That gap makes it critical to know whether income is being taxed at the trust level or to beneficiaries.”
Georgia’s rules add another layer. Trusts with a Georgia connection generally face the state’s flat income tax rate on their taxable income in 2026, whether they earn $5,000 or $500,000. Trustees must account for both federal and state rules when determining whether and how to file.
The filing deadline for calendar-year trusts typically matches the April 15 individual deadline. Trusts that expect to owe at least $1,000 in federal tax after credits may also be required to make quarterly estimated payments, a requirement that some individual trustees overlook until they receive IRS notices.
Slowik noted that irrevocable trusts raise additional planning questions. Under IRS guidance issued in 2023, assets transferred as completed gifts to certain irrevocable trusts may not receive a step-up in basis at the grantor’s death if they are excluded from the taxable estate, potentially increasing capital gains taxes when those assets are sold.
“Trusts are powerful tools, but they do not operate outside the tax system,” Slowik said. “As April 15 approaches, trustees should confirm how their trusts are classified, whether income has been distributed properly, and whether all required Forms 1041 and K‑1 will be filed on time.”
Slowik added that reviewing the trust document, recent account statements and prior-year tax returns together can help trustees and families avoid last-minute confusion and reduce the risk of costly filing mistakes as the deadline nears.
Founded by Jake Slowik, a Harvard Law School graduate and longtime Atlanta resident, Slowik Estate Planning guides families through the complexities of wills, trusts and legacy planning. Jake’s personal experience with loss and his passion for service drive his commitment to helping others achieve lasting peace of mind. The firm is dedicated to making the estate planning process clear, approachable and focused on the well-being of every client and their loved ones.
Slowik Estate Planning
5555 Glenridge Connector Suite 620 Sandy Springs, GA 30342
(404) 538-9030
https://slowikestateplanning.com/
Press Contact : Jake Slowik
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