Trust, Gift & Estate Tax Returns Prepared With the Precision These Filings Demand
These returns don't come around every year — and the stakes are high when they do. Whether you're a trustee filing a Form 1041 for the first time, an executor working through a federal or Washington estate tax return (Form 706), or a client who made a significant gift and isn't sure whether Form 709 is required, we prepare these filings with the legal and tax background they require.
Which Returns Fall Into This Category
Trust, gift, and estate returns are a distinct category of tax filings — each governed by its own rules, thresholds, and deadlines. We prepare all three:
- Form 1041 — Trust and Estate Income Tax Return. Filed annually for trusts and estates that generate income. Required when a trust or estate earns more than $600 in gross income during the tax year, or when a beneficiary is a nonresident alien. Covers interest, dividends, rental income, capital gains, and distributions to beneficiaries.
- Form 709 — United States Gift and Generation-Skipping Transfer Tax Return. Filed when a taxpayer makes gifts that exceed the annual exclusion ($18,000 per recipient in 2024) or that involve certain transfers regardless of amount — including gifts to irrevocable trusts and direct skips. Many clients are surprised to learn that filing Form 709 doesn't always mean owing tax; it often means reporting the gift and applying the lifetime exemption.
- Form 706 — United States Estate (and Generation-Skipping Transfer) Tax Return. Filed for estates that exceed the federal exemption threshold (currently $13.61 million per individual in 2024). Washington State also imposes a separate estate tax with a much lower threshold — $2.193 million — which means Washington residents may owe state estate tax even when no federal return is required.
What the Preparation Process Looks Like
We work with trustees, executors, personal representatives, and the families they serve. Here is what to expect when you engage us for one of these filings:
- Initial review. We gather the relevant documents — trust agreement, date-of-death asset values, account statements, prior returns if applicable — and identify which returns are required and when they are due.
- Return preparation. We prepare the return with attention to available elections, deductions, and the downstream effects on beneficiaries or future estate calculations.
- Review and explanation. Before filing, we walk you through what the return reports, what it means for the estate or trust, and whether any planning considerations arise from what we found.
- Filing and recordkeeping. We file electronically where permitted and provide copies for your records and the estate file.
For ongoing trust administration, we can serve as the trust's tax preparer year over year — maintaining continuity as the trust's circumstances evolve.
Why These Filings Require More Than a Standard Tax Preparer
Most tax preparers handle W-2s and Schedule C returns. Trust, gift, and estate filings are a different discipline — one that sits at the intersection of tax law, fiduciary duty, and estate planning. Errors in these returns can affect beneficiaries, trigger penalties, or create downstream problems in estate administration.
Our credential stack is built for exactly this kind of work. Jason Hedlund holds a JD, an LL.M. in Taxation, an MBA, and the CFP® designation — a combination that covers the legal framework behind trusts and estates, the tax mechanics of each return type, and the financial planning context that shapes how these decisions interact. That background matters when the return involves a discretionary trust, a step-up in basis question, or a gift that may affect Medicaid eligibility or a future estate plan.
Form 1041: Ongoing Filings for Trusts and Estates
Most tax preparers handle W-2s and Schedule C returns. Trust, gift, and estate filings are a different discipline — one that sits at the intersection of tax law, fiduciary duty, and estate planning. Errors in these returns can affect beneficiaries, trigger penalties, or create downstream problems in estate administration.
Our credential stack is built for exactly this kind of work. Jason Hedlund holds a JD, an LL.M. in Taxation, an MBA, and the CFP® designation — a combination that covers the legal framework behind trusts and estates, the tax mechanics of each return type, and the financial planning context that shapes how these decisions interact. That background matters when the return involves a discretionary trust, a step-up in basis question, or a gift that may affect Medicaid eligibility or a future estate plan.
Form 709: When a Gift Requires a Return
Not every large gift triggers a tax bill — but many trigger a filing obligation. Form 709 is required whenever a taxpayer makes gifts to a single recipient that exceed the annual exclusion, makes a gift of a future interest regardless of amount, or transfers assets to certain trusts. Filing 709 correctly means applying the lifetime exemption accurately and preserving a clean record for the estate calculation that will eventually follow. We help clients understand whether a return is required, what it reports, and how it interacts with their broader estate plan.
Form 706: Federal and Washington State Estate Tax
Washington is one of a small number of states that imposes its own estate tax — and at a threshold significantly below the federal level. An estate that falls entirely under the federal exemption may still owe Washington estate tax if the taxable estate exceeds $2.193 million. The two returns are filed separately, calculated differently, and subject to different deduction rules. We prepare both the federal Form 706 and the Washington State Estate and Transfer Tax Return, and we coordinate with the estate's attorney when the administration involves ongoing legal work.
Washington State Estate Tax: What Families Often Miss
Washington's estate tax applies to the taxable estate — which includes real property, investment accounts, retirement assets, life insurance proceeds (in some cases), and business interests. The graduated rate structure runs from 10% to 20% on amounts above the exemption threshold. Families who have built wealth through real estate, a closely held business, or decades of investment accumulation can find themselves in Washington estate tax territory even when no federal return is required. Early planning conversations — ideally years before the estate is settled — can significantly affect the outcome. If you're working through an estate now, we can help you understand the filing requirements and the available deductions.
Who We Typically Work With on These Filings
These filings tend to involve people in the middle of something significant — a death in the family, a major gift, the first year of trust administration. We work with:
- Trustees of irrevocable trusts who need annual 1041 preparation and Schedule K-1s for beneficiaries
- Personal representatives and executors handling estate administration and the final tax filings
- Surviving spouses navigating the first tax year after a loss, including portability elections on Form 706
- Clients who made substantial gifts during the year and need Form 709 prepared accurately
- Families working with an estate planning attorney who need a tax preparer to handle the return side of the plan
We serve clients throughout the South Puget Sound — including Federal Way, Tacoma, Kent, Auburn, Puyallup, and Renton — and work virtually with Washington families statewide.
Frequently Asked Questions
Do I need to file a gift tax return if I gave money to my child this year?
It depends on the amount and the type of gift. If you gave a single recipient more than $18,000 in 2024 (the annual exclusion amount), you are required to file Form 709 — even if no tax is owed. Gifts of future interests, contributions to certain irrevocable trusts, and direct skips to grandchildren also require a return regardless of amount. Filing 709 doesn't necessarily mean you owe gift tax; it typically means you are applying a portion of your lifetime exemption and creating a record of that use.Who files a trust tax return in Washington?
The trustee is responsible for filing Form 1041 on behalf of the trust. If the trust generated more than $600 in gross income during the year — from interest, dividends, rental income, capital gains, or other sources — a return is required. The trustee signs the return and is responsible for distributing Schedule K-1s to any beneficiaries who received income allocations during the year.Does Washington State have its own estate tax?
Yes. Washington imposes a separate estate tax on taxable estates exceeding $2.193 million — well below the current federal exemption of $13.61 million. This means many Washington residents will owe state estate tax even when no federal Form 706 is required. The Washington estate tax uses a graduated rate structure ranging from 10% to 20%, and it is calculated and filed separately from the federal return using the Washington State Estate and Transfer Tax Return.What is the difference between an estate income tax return (1041) and an estate tax return (706)?
These are two distinct filings that serve different purposes. Form 1041 is an income tax return filed for a trust or estate that earns income — it reports interest, dividends, rents, and other income generated by estate or trust assets after the date of death. Form 706 is an estate tax return filed when the total taxable estate exceeds the applicable exemption threshold — it values all assets owned at death and calculates any estate tax owed. An estate may need to file both, one, or neither, depending on its size and the income it generates during administration.