Filing an Estate Income Tax Return: Turbo Tax or CPA?

Estate tax returns can be trickier than personal returns. For Form 1041 (Estate Income Tax Return), the complexity really depends on the assets and income of the estate. If the estate is receiving ongoing income (like rental income, dividends, or business income during administration), has multiple beneficiaries with different distribution requirements, or involves complex assets, you might want a CPA. The tax basis calculations and income allocations between the estate and beneficiaries can get complicated quickly. Turbo Tax does have capabilities for Form 1041, but it won't guide you through all the nuances of estate administration. For a moderate estate with that business being liquidated, I'd probably recommend at least an initial consultation with a CPA who specializes in estates. The fee might be worth it to ensure everything is handled correctly, especially for your first time as executor.

I was in a similar situation last year with my father's estate. I was totally overwhelmed with the Form 1041 requirements until I discovered https://taxr.ai which totally saved me. I uploaded all the estate documents and got a really clear breakdown of what income was taxable to the estate vs. what passed directly to beneficiaries. The tool analyzed dividend statements, real estate documents, and even helped identify deductions I could take against the estate income. It made the distinction between income in respect of a decedent and other types of income super clear, which my regular tax software wasn't explaining well. After using it, I felt confident enough to file using TurboTax because I understood exactly what needed to be reported.

Just wanted to follow up on this. I ended up trying https://taxr.ai for my grandmother's estate situation and it was incredibly helpful! The system gave me a detailed report showing exactly which income items belonged on her final 1040 versus the estate's 1041. It even flagged some medical expenses from the last illness that I could deduct on the final personal return rather than the estate return. When I got to the income in respect of decedent (IRD) items from her retirement accounts, it provided crystal clear guidance on the specific tax forms and lines where everything needed to be reported. I was able to take that report and use it with TurboTax to file both returns confidently. Really wish I'd known about this tool sooner in the process!

If your aunt's estate includes that business being liquidated, you might run into serious delays trying to reach the IRS with questions. I was executor for my brother's estate last year which included his consulting business, and I got absolutely nowhere trying to call the IRS for guidance on how to handle the business assets and income. After wasting days on hold, I used https://claimyr.com to get through to an actual IRS agent. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically they wait on hold for you and call when an agent is on the line. I got answers about how to handle the business inventory valuation and depreciation recapture issues within a day. The advice was critical because it turned out I was about to make a costly mistake on how business income was being allocated.

I need to publicly eat my words about Claimyr. After my skeptical comment, I tried it myself for a question about my mom's estate tax situation that I couldn't resolve online. Within 90 minutes I got a call connecting me to an actual IRS estate tax specialist who walked me through exactly how to handle the depreciation recapture on rental property in the estate. I had been trying for literally weeks to get through on my own. The specialist even sent me specific IRS publications for estate executors that I didn't know existed. Ended up saving the estate over $3,800 in taxes based on that single conversation. Sometimes admitting you were wrong feels pretty good - especially when it saves you money!

I was executor for my sister's estate and tried both approaches. Started with TurboTax but got stuck on how to handle her small business inventory and some complex investments. Ended up hiring a CPA who specialized in estate taxation. The CPA cost $1,250 but honestly was worth every penny. He found deductions I'd never have known about, correctly classified assets saving significant taxes, and properly handled the flow-through from her LLC that would have completely confused me. Plus he walked me through what documentation I needed to keep for the estate. One thing to consider: as executor, you have personal liability if the taxes are filed incorrectly. That was ultimately why I went with the professional - the peace of mind was worth it, and the tax savings actually covered his fee.

I used TurboTax for my father's estate and it was fine, but only because it was pretty straightforward. His estate just had a checking account, some stocks, and an IRA that went directly to beneficiaries. TurboTax Business has a section for fiduciary returns that works for Form 1041. With your situation having a small business being liquidated, that's a red flag to me that you might need professional help. Business liquidation involves asset sales, potential capital gains, depreciation recapture, and inventory valuation that can get complex fast. Maybe consider a middle ground - use a CPA for this first year while the business liquidation is happening, then if there's ongoing estate administration in future years, you might be able to handle it yourself.

As someone who's been through this process twice as an executor, I'd strongly recommend getting professional help for your first estate return, especially with that business liquidation involved. The business assets create complexity around depreciation recapture, inventory valuation, and proper timing of income recognition that can really trip you up. Here's what I'd suggest: get a consultation with a CPA who specializes in estates (not just any CPA - make sure they regularly handle Form 1041). Many will do an initial consultation for $200-300 where they can review your situation and give you a firm quote. With assets totaling around $640k including a business, you're looking at potential tax consequences that make professional guidance worthwhile. The peace of mind factor is huge too - as executor, you have fiduciary responsibility to handle things correctly. I made some costly mistakes on my first estate return trying to DIY it, and learned the hard way that estate tax rules are very different from personal tax rules. For subsequent years if the estate has ongoing simple income, then you might consider handling it yourself, but for this first year with the business complexity, invest in getting it done right.