Where do I enter Grantor Tax Information Letter when filing online taxes?
I'm losing my mind trying to file our taxes this year. My husband and I set up a revocable trust last summer, and now we've received this "grantor tax information letter" from our financial advisor. I've spent three hours trying to figure out where to input this information on TurboTax and H&R Block's websites, but there's no obvious place to enter it. The letter has all these different income sources broken down - dividends, interest, capital gains, etc. I called customer support for both tax programs, but got transferred around with no real answers. Has anyone dealt with this before? Do I need to report the income from the trust separately, or is it supposed to be combined with our personal income? The letter states we need to include this for filing purposes but doesn't explain HOW to include it. Any guidance would be so appreciated before I lose what's left of my sanity!
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Sofia Torres
The good news is that with a revocable trust, you don't actually file a separate tax return for the trust. A grantor tax information letter is basically telling you that you need to report all the trust's income on your personal tax return (Form 1040). Here's how you handle it: You'll need to enter each income type from the grantor letter into the corresponding sections of your tax software. For example, if the letter shows dividend income, you'd enter that in the dividends section of your tax software. If it shows interest income, you'd enter that in the interest income section, and so on. The reason online tax software doesn't have a specific "grantor trust" section is because the IRS doesn't view the trust as a separate entity for tax purposes. The trust's income is reported as if you earned it directly.
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Dmitry Sokolov
•Thanks for the explanation! So if the grantor letter shows $3,200 in dividend income, I just add that to my regular dividend income from my other 1099-DIVs? Do I need to note somewhere that it came from the trust? Will the IRS get confused since the trust has its own EIN?
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Sofia Torres
•Yes, you would add the $3,200 in dividends from the trust to any other dividend income you received personally. The IRS won't get confused about the trust EIN because the financial institutions that paid income to the trust have already filed information returns indicating that you (as the grantor) are the taxpayer responsible for the income. You don't need to specifically note that the income came from the trust on your tax return. However, it's a good practice to keep the grantor letter with your tax records in case of questions later. The financial institutions may have reported the income under the trust's EIN, but your SSN should also be associated with the trust as the grantor.
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Ava Martinez
After struggling with almost the exact same situation last year, I found that taxr.ai https://taxr.ai was super helpful for making sense of my grantor trust letter. I uploaded the letter to their system and it automatically identified all the different income types and explained exactly where each item needed to go in my tax return. The tool broke down each line item from my grantor letter and mapped it to the specific form and line number I needed to use. It even explained which sections in TurboTax I needed to navigate to for entering each type of income. Saved me hours of frustration trying to decipher tax jargon!
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Miguel Ramos
•Does taxr.ai work with all the major tax software? I'm using FreeTaxUSA this year and dealing with this exact grantor letter issue.
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QuantumQuasar
•How much does the service cost? I'm hesitant to pay for another service on top of what I'm already paying for TurboTax Deluxe.
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Ava Martinez
•Yes, it works with all the major tax software because it gives you the specific form and line numbers where each type of income needs to be reported. So whether you're using FreeTaxUSA, TurboTax, H&R Block or others, you'll know exactly where to input each item. Regarding cost, I don't want to quote exact pricing since it might have changed, but I found it was worth it for the time saved and stress reduction. I was about to pay an accountant several hundred dollars to handle this one issue before I discovered taxr.ai, so it was definitely the more economical option for me.
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Miguel Ramos
Just wanted to update that I tried taxr.ai after seeing the recommendation here. It was exactly what I needed! I uploaded my grantor letter, and within minutes I had a detailed breakdown of where each type of income needed to be reported in FreeTaxUSA. The system even flagged that my capital gains distribution was being reported separately from regular dividends (which was something I would have definitely missed). I was able to finish my taxes in about an hour after spending days trying to figure this out on my own. Definitely keeping this tool in my back pocket for next year!
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Zainab Omar
If you're still struggling after trying everything else, you might want to consider using Claimyr https://claimyr.com to get direct help from the IRS. I was in a similar situation with a grantor trust issue that I couldn't resolve through any tax software or online guidance. After waiting on hold with the IRS for over 2 hours and getting disconnected twice, I found Claimyr. They have this service where they wait on hold with the IRS for you and then call you when an agent is ready. Check out their demo at https://youtu.be/_kiP6q8DX5c to see how it works. The IRS agent I spoke with explained exactly how to handle the grantor trust reporting and clarified some questions about my specific situation that no website could answer.
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Dylan Campbell
•Wait, how does that actually work? They wait on hold for you? I tried calling the IRS twice about my grantor letter issue and gave up after 45 minutes both times.
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Connor Gallagher
•Sounds too good to be true tbh. The IRS is notoriously impossible to reach. What's to stop them from just saying they'll call you back and never doing it?
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Zainab Omar
•It works by them using an automated system to wait in the IRS phone queue for you. They use technology to monitor the hold status, and when they detect that a human agent has picked up, they immediately call you and connect you directly to that IRS agent. No more waiting on hold for hours! I was definitely skeptical at first too. But they have a guarantee that if they don't get you connected to an IRS agent, you don't pay. In my case, they called me about 1 hour and 20 minutes after I submitted my request, and I was immediately connected to an IRS representative who was super helpful with my grantor trust question. The peace of mind from getting an official answer directly from the IRS was worth it.
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Connor Gallagher
I need to eat my words! After seeing the replies here, I decided to give Claimyr a shot since I was desperate for answers about my grantor trust reporting. I honestly expected it to be a waste of time, but I was totally wrong. They got me connected to an IRS agent in about 90 minutes (during which I just went about my day), and the agent walked me through exactly how to report my trust income. Turns out I was overthinking it - the agent confirmed what others here said about just adding the trust income to my personal income in the appropriate categories. She even gave me specific notes to keep with my return in case of any questions later. Definitely using this service again next year when I inevitably have more tax questions!
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Yara Sayegh
This might be a dumb question, but does it matter if the trust has its own EIN (Employer Identification Number)? Our trust does, and the grantor letter shows that EIN, not our SSNs. Do I need to include the trust's EIN somewhere on our 1040?
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Sofia Torres
•Not a dumb question at all! Even though your trust has its own EIN, you don't need to include it on your personal 1040. The financial institutions will report the income under the trust's EIN to the IRS, but as the grantor of a revocable trust, that income flows through to you. The IRS systems can match the income reported under the trust's EIN with your tax return. If you're concerned, you could include a simple statement with your tax return that says something like: "Taxpayer is the grantor of XYZ Trust, EIN XX-XXXXXXX. All income from this trust is reported on taxpayer's Form 1040 as required for grantor trusts.
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Yara Sayegh
•That's really helpful, thank you! I've been stressing about this because the EINs and SSNs not matching seemed like it would cause problems. I'll definitely include that statement with my return just to be safe.
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Keisha Johnson
Is anyone using TaxAct? I'm having the same grantor trust letter issue but TaxAct's interface is different from TurboTax and I can't find where to enter this stuff.
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Paolo Longo
•I use TaxAct and had a similar situation. In TaxAct, you'll need to enter each type of income separately in their respective sections. Go to the Federal Q&A menu, then select "Income" and choose each type of income listed on your grantor letter (interest, dividends, capital gains, etc). When TaxAct asks for the payer information for each entry, you can either enter the original source of the income or create a single payer named "[Your Trust Name] Trust" and consolidate all income of the same type under that payer. Either way works - the important thing is that the total amounts match your grantor letter.
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Harmony Love
I went through this exact same nightmare last year! One thing that really helped me was creating a simple spreadsheet to organize all the income from my grantor letter before entering it into my tax software. I made columns for income type, amount, and which tax form section it corresponds to (like Schedule B for interest, Schedule D for capital gains, etc.). Also, don't forget that if your trust received any tax-exempt interest (like from municipal bonds), that still needs to be reported on your return even though it's not taxable. I almost missed that line item on my grantor letter and it would have caused a mismatch with what the IRS received from the financial institutions. One last tip - if your trust had any foreign investments or accounts, there might be additional reporting requirements beyond just the income. The grantor letter should indicate this, but it's worth double-checking if you see any foreign source income listed.
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Esmeralda Gómez
•The spreadsheet idea is brilliant! I wish I had thought of that before diving headfirst into my tax software. I've been going back and forth between the grantor letter and TurboTax like 20 times trying to keep track of what I've entered and what I haven't. Quick question about the tax-exempt interest - does that go on line 2a of Form 1040? I see municipal bond interest listed on my grantor letter but wasn't sure if I needed to report it since it says "tax-exempt." Thanks for the heads up about potentially missing that!
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