Trust & Estate Tax Preparation in Prescott, AZ
Serving as an executor, trustee, or personal representative can involve complex tax responsibilities, including final individual returns, estate income tax filings, and beneficiary reporting.
Florence Tax LLC provides trust and estate tax preparation in Prescott, Arizona, helping families, executors, and trustees understand their filing obligations and prepare applicable federal and Arizona tax returns.
Services include Form 1041 fiduciary income tax returns, Arizona Form 141AZ, final individual tax returns, Schedule K-1 beneficiary reporting, and Form 706 federal estate tax returns, when applicable.
Our goal is to make trust and estate tax responsibilities clearer and more manageable.
Experienced Guidance
Tax expertise for complex situations.
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Enrolled Agent
federally licensed with unlimed representation rights before the IRS.
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Virtual-First Process
Secure. Convenient. Personalized.
Prescott & Beyond
Serving Prescott, Prescott Valley and surrounding communities.
Who Needs Trust & Estate Tax Preparation?
Who We Help
Trust and estate tax responsibilities often fall to people who have never dealt with them before.
An Executor or Personal Representative
You've been entrusted with administering someone's estate and need to determine which federal and state tax returns must be prepared.
A Trustee
You're responsible for a trust that holds investments, property, cash, or other assets and need to determine how the trust's income and distributions should be reported.
A Surviving Spouse
You're trying to coordinate your spouse's final individual return with estate or trust filings and determine whether additional estate-tax considerations apply.
A Family Member Helping With an Estate
You're gathering records, working with attorneys and financial institutions, and trying to determine what tax filings remain before the estate can be completed.
A Beneficiary
You've received—or expect to receive—a Schedule K-1 from an estate or trust and want to understand how that information affects your individual income tax return.
Florence Tax can help identify the tax filings involved and coordinate the different pieces.
Final Individual Income Tax Return
Form 1040
A deceased person's final individual income tax return generally reports income and deductions attributable to the individual through the applicable final tax period.
This is still the individual's income tax return.
Final Form 1040, Form 1041 or Form 706?
UNDERSTANDING THE DIFFERENT ESTATE & TRUST TAX RETURNS
They Are Three Different Tax Returns
Not sure which returns apply to your estate or trust? Florence Tax can help you determine the next steps.
Estate or Trust Income Tax Return
Form 1041
An estate or trust can become a separate income-tax reporting entity.
Form 1041 is used by fiduciaries of qualifying estates and trusts to report income, deductions, gains, losses, income accumulated or distributed to beneficiaries, and applicable income-tax liability. (IRS)
This is often what someone actually needs when they say they need an “estate tax return.”
Federal Estate Tax Return
Form 706
Form 706 is different.
It is the United States Estate (and Generation-Skipping Transfer) Tax Return and is used to calculate federal estate tax and applicable generation-skipping transfer tax. It can also be important for making a portability election for a surviving spouse. (IRS)
Need assistance with Form 706? Request a consultation to discuss your estate's filing requirements.
UNDERSTANDING INCOME EARNED DURING ESTATE ADMINISTRATION
Estate Income Tax Returns — Form 1041
A person's tax responsibilities don't necessarily end with the final individual income tax return.
Assets can continue producing income while an estate is being administered.
That might include:
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Interest
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Dividends
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Investment income
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Capital gains and losses
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Rental income
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Business-related income
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Other income generated by estate assets
When applicable, that activity is reported through the estate rather than simply being added to the deceased individual's final tax return.
The fiduciary of an estate uses Form 1041, U.S. Income Tax Return for Estates and Trusts, to report applicable income, deductions, gains, losses, distributions and income-tax liability. (IRS)
Florence Tax can help the executor or personal representative identify the tax information belonging to the estate and prepare the appropriate fiduciary income tax return.
DIFFERENT TRUSTS. DIFFERENT TAX RESPONSIBILITIES.
Trust Income Tax Returns
Trust taxation can be particularly confusing because not every trust is taxed the same way.
The type of trust, its governing provisions, who is treated as the owner for income-tax purposes, the income it receives, and whether income is retained or distributed can all affect the tax reporting.
For that reason, having a trust doesn't automatically mean that every trust files the same return in the same way.
Florence Tax can review the relevant trust information and tax documents to help determine the appropriate income-tax reporting and prepare required returns.
For trusts requiring Form 1041, the return may address income such as interest, dividends, investment gains and losses, rental activity and other taxable items, along with applicable deductions and beneficiary distributions.
The objective is to properly report the tax activity of the trust while coordinating the information that may also need to be reported by its beneficiaries.
COORDINATING FEDERAL & STATE FIDUCIARY FILINGS
Federal & Arizona Fiduciary Tax Returns
Trust and estate tax preparation may involve both federal and Arizona filings.
At the federal level, Form 1041 is the primary income-tax return for estates and trusts that have a filing requirement.
Arizona has its own fiduciary income tax return: Form 141AZ.
The Arizona Department of Revenue currently requires Form 141AZ for an estate or trust with Arizona taxable income for the year or gross income of at least $5,000, regardless of the amount of Arizona taxable income. (Arizona Department of Revenue)
Arizona also maintains separate fiduciary forms for beneficiary reporting, extensions, payments and estimated tax payments. (Arizona Department of Revenue)
Florence Tax can coordinate applicable federal and Arizona fiduciary filings so the executor or trustee doesn't have to treat them as unrelated tax obligations.
SEPARATING INDIVIDUAL INCOME FROM ESTATE INCOME
Final Tax Returns for a Deceased Person
The Final Individual Return and Estate Return Are Not the Same Thing.
When someone dies, there can be an important dividing line between income belonging to the individual and income belonging to the estate.
The individual's final Form 1040 and an estate's Form 1041 may therefore be part of the same overall administration process, but they serve different purposes.
Florence Tax can help coordinate these filings so income and other tax items are reported on the appropriate returns.
This may involve reviewing:
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W-2s and 1099s
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Retirement distributions
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Social Security benefits
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Interest and dividends
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Investment transactions
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Rental property activity
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Business interests
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Estimated tax payments
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Other income and deductions
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Income received after death
Having one tax professional understand both the individual and fiduciary filings can make it easier to see how the different pieces fit together.
FROM FIDUCIARY REPORTING TO BENEFICIARY RETURNS
Schedule K-1 & Beneficiary Tax Reporting
Trust and Estate Income Can Affect the Beneficiaries Too.
Preparing Form 1041 may be only one part of the tax-reporting process.
When applicable income, deductions, credits or other tax items are allocated to beneficiaries, the estate or trust uses Schedule K-1 (Form 1041) to report each beneficiary's applicable share.
The beneficiary then uses that information when preparing their own tax return. (IRS)
Think of the process as:
Estate or Trust Earns Income
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Form 1041 Reports the Fiduciary Tax Activity
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Schedule K-1 Reports Applicable Beneficiary Tax Information
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Beneficiary Reports Applicable Items on Their Individual Return
Florence Tax can prepare applicable Schedule K-1s as part of the fiduciary return and help coordinate the reporting when Florence Tax is also preparing a beneficiary's individual return.
Estates and trusts frequently contain more than cash.
An executor or trustee may be managing investment accounts, securities, real estate, business interests and other assets while the estate or trust is being administered.
That can create tax issues involving:
Investment income. Interest and dividends may continue to be earned.
Capital gains and losses. Assets may be sold while held by the estate or trust.
Rental property. Real estate may continue producing rental income before it is distributed or sold.
Business interests. Ownership in a business can create additional tax reporting.
Distributions. Income retained by the estate or trust and income distributed to beneficiaries can have different tax consequences.
Good fiduciary tax preparation therefore requires more than collecting a few tax forms. It requires understanding which taxpayer the activity belongs to and how it should be reported.
Income, Investments & Property Inside an Estate or Trust
WHEN ASSETS GENERATE TAXABLE ACTIVITY
BRINGING FIDUCIARY TAX REPORTING CURRENT
Prior-Year & Delinquent Fiduciary Returns
Sometimes an executor or trustee discovers that an estate or trust should have filed returns in previous years but didn't.
That doesn't mean the problem should continue to be postponed.
Florence Tax can help review the filing history, identify missing federal or Arizona fiduciary returns, organize available records, and prepare prior-year filings.
Depending on the circumstances, this may involve reconstructing income and expenses, reviewing distributions, identifying beneficiary information and determining which filings remain outstanding.
The objective is to bring the tax reporting current so the fiduciary can move forward with a clearer understanding of the remaining responsibilities.
MORE THAN AN ESTATE TAX OBLIGATION
Federal Estate Tax Returns — Form 706
Does an Estate Need to File Form 706?
Form 706 and Form 1041 serve different purposes. Form 1041 reports income earned by an estate or trust, while Form 706, the federal estate tax return, addresses the value of a deceased person's estate and applicable federal estate-tax obligations.
For deaths occurring in 2026, the federal estate tax basic exclusion amount is $15 million. Filing requirements depend on the year of death and the estate's circumstances. (IRS)
Portability Can Create a Filing Reason Too
Even when an estate falls below the filing threshold, Form 706 may be necessary to elect portability, allowing a surviving spouse to use a deceased spouse's unused estate tax exclusion (DSUE). (IRS)
An estate doesn't have to owe federal estate tax for Form 706 to be important.
Florence Tax LLC prepares Form 706 federal estate tax returns, including filings involving portability. Because these returns may require asset valuations, lifetime gift information, and trust records, early preparation can help simplify the process.
SUPPORT FOR THOSE ENTRUSTED WITH AN ESTATE
Working With Executors & Personal Representatives
Being named an executor or personal representative doesn't mean you're expected to become a tax expert.
Your responsibility may involve gathering information from banks, brokerage firms, attorneys, beneficiaries and other parties while also dealing with the practical responsibilities that follow someone's death.
Florence Tax can help organize the tax side of that process.
We can work with you to identify relevant tax documents, distinguish individual activity from estate activity, prepare applicable income and estate tax returns, and provide beneficiary tax reporting when required.
That gives you a clearer picture of which tax tasks have been addressed and what may remain.
CONSISTENCY THROUGHOUT THE LIFE OF A TRUST
Working With Trustees
Trustees can face ongoing tax responsibilities as long as a trust remains active.
Depending on the type of trust and its activities, that may involve gathering annual tax documents, tracking income and expenses, identifying distributions, preparing fiduciary returns, and providing tax information to beneficiaries.
Florence Tax can assist trustees with the tax-preparation side of trust administration and help establish an organized process for recurring filings when necessary.
For trusts that continue for multiple years, consistency can be particularly valuable because the current year's return often builds upon information reported previously.
BRINGING THE TAX PIECES TOGETHER
Coordinating With Attorneys & Other Professionals
Trust and estate administration often involves several professionals.
An estate-planning or probate attorney may handle legal matters.
Financial advisors or investment custodians may provide account and asset information.
Appraisers may be needed for certain valuations.
And the tax professional handles the applicable income and estate tax filings.
Florence Tax can work with the information provided by these professionals so the tax reporting fits into the broader administration process.
This collaborative approach can be especially important when preparing Form 706, where supporting information may include appraisals, trust documents, prior gift-tax returns and other records. The IRS's current Form 706 instructions specifically identify several types of supporting documentation that may need to accompany the return. (IRS)
DIFFERENT ROLES. COMPLEMENTARY SERVICES.
Tax Preparation, Not Estate-Planning Legal Services
It's important to distinguish trust and estate tax preparation from estate-planning legal services.
Florence Tax provides tax preparation and tax guidance related to trusts and estates.
Florence Tax does not draft wills, create or amend trusts, prepare powers of attorney, conduct probate proceedings, or provide legal advice.
When a matter requires legal interpretation or estate-planning documents, an attorney should provide that guidance.
Florence Tax can then coordinate the tax work with information provided by the attorney and other professionals involved.
Our Trust & Estate Tax Preparation Process
Every estate and trust is different, but our tax-preparation process generally follows five steps.
Identify
Determine the type of estate or trust, review the available information, and identify which federal and Arizona tax filings may be required.
1
A STRUCTURED APPROACH TO ESTATE & TRUST TAX FILINGS
Gather
Collect the relevant tax documents, income records, expense information, asset activity, distribution information, beneficiary details and other supporting documentation.
2
Coordinate
Separate individual activity from estate or trust activity, coordinate information from attorneys or financial professionals when necessary, and identify beneficiary reporting requirements.
3
Prepare
Prepare the applicable federal and Arizona returns, which may include Form 1041, Form 141AZ, beneficiary Schedules K-1, a final individual income tax return and Form 706 when applicable.
4
Complete
Provide the completed returns and applicable beneficiary information and identify additional filings or future tax responsibilities that may remain.
5
CONNECTING THE PIECES OF ESTATE & TRUST TAXATION
Trust & Estate Tax Preparation With an Enrolled Agent
Amber Rose Florence is an Enrolled Agent, a federally authorized tax professional.
That tax expertise is particularly useful when an estate involves several interconnected returns.
Rather than looking at the final individual return, fiduciary return, beneficiary reporting and federal estate-tax return as completely separate matters, Florence Tax can help determine how the tax pieces relate to one another.
The result is a more coordinated approach to fulfilling the estate's or trust's tax-reporting responsibilities.
TRUST & ESTATE TAX SERVICES ACROSS YAVAPAI COUNTY
Trust & Estate Tax Preparation in Prescott & Surrounding Communities
Florence Tax LLC is based in Prescott, Arizona, and provides trust and estate tax preparation for executors, trustees, personal representatives and families in Prescott and surrounding communities, including Prescott Valley, Chino Valley and Dewey-Humboldt.
Our virtual-first model also allows Florence Tax to work with clients outside the immediate Prescott area when their trust or estate tax needs are a good fit for the practice.
Trust & Estate Tax Preparation FAQs
COMMON QUESTIONS ABOUT ESTATE & TRUST FILINGS
Trust and estate tax responsibilities can raise questions about filing requirements, deadlines, and beneficiary reporting. Explore answers to common questions about Form 1041, Form 706, final individual tax returns, and other tax considerations for executors, trustees, and families.
Form 1041 is the U.S. Income Tax Return for Estates and Trusts. Fiduciaries use it to report applicable income, deductions, gains, losses, beneficiary distributions and income-tax liability of an estate or trust. (IRS)
No. Tax reporting depends on the type of trust, its tax treatment, income and other circumstances. Florence Tax can review the relevant information to help determine which filing requirements apply.
Form 1041 is an income tax return for an estate or trust. Form 706 is a federal estate tax return used to calculate applicable estate and generation-skipping transfer taxes and can also be used to make a portability election. (IRS)
Yes. Florence Tax provides Form 706 federal estate tax return preparation in addition to fiduciary income tax preparation.
No. Filing depends on factors including the year-of-death filing threshold and other circumstances. A Form 706 may also be filed to make a portability election for a surviving spouse even when the estate is below the general filing threshold. (IRS)
Portability generally refers to transferring a deceased spouse's unused federal estate-tax exclusion—the deceased spousal unused exclusion or DSUE—to a surviving spouse. An estate electing portability does so through Form 706. (IRS)
Yes. Florence Tax can prepare the deceased person's final individual income tax return and coordinate it with applicable estate tax filings.
Schedule K-1 reports a beneficiary's applicable share of income, deductions, credits and other tax items from an estate or trust. Beneficiaries use the K-1 information when preparing their own tax returns. (IRS)
Yes. Arizona uses Form 141AZ, Arizona Fiduciary Income Tax Return. Arizona currently requires the return for an estate or trust with Arizona taxable income or gross income of at least $5,000, regardless of the amount of Arizona taxable income. (Arizona Department of Revenue)
Yes. Estates and trusts can hold income-producing assets such as investment accounts and real estate. Florence Tax can address applicable income, gains, losses and other tax information as part of preparing the fiduciary return.
Yes. If required fiduciary returns weren't filed in previous years, Florence Tax can help determine what is outstanding and prepare applicable prior-year returns.
No. Florence Tax provides tax preparation and tax guidance. We don't draft trusts, wills or other estate-planning legal documents or provide legal advice. We can coordinate tax matters with your attorney when appropriate.
No. Florence Tax is based in Prescott and serves the surrounding communities, but its primarily virtual model allows the firm to work with clients elsewhere when their tax needs are a good fit.
