Form 1041-A Checklist for Tax Year 2019
Overview and Purpose
Form 1041-A is the mandatory information return for trusts claiming charitable deductions under Internal Revenue Code section 642(c). This form fulfills the reporting requirements established by Section 6034, ensuring that the IRS receives detailed information about philanthropic distributions and set-asides made by qualifying trusts.
Applicable Form Revision
For tax year 2019, trusts use Form 1041-A (Rev. September 2018). This revision incorporates the Tax Cuts and Jobs Act amendments, exempting Electing Small Business Trusts from filing requirements for tax years after December 31, 2017.
Key Filing Information
Filing Deadline: April 15, 2020 (or next business day)
Income Threshold: $25,000 (determines reporting detail level)
Extension: Form 8868 provides an automatic six-month extension to October 15, 2020
Filing Address: Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201-0027
Penalties: $10 per day, maximum $5,000 per entity for late filing without reasonable cause
Who Must File
Trustees must file Form 1041-A for any trust claiming a charitable deduction under section 642© during 2019, regardless of the deduction amount.
Filing Exceptions
Trusts required to distribute all income currently under section 643(b) are exempt. Charitable trusts, under Section 4947(a)(1), do not file. Split-interest trusts under section 4947(a)(2) file Form 5227 instead. Electing Small Business Trusts (ESBTs) under section 641(c) are exempt for tax years after December 31, 2017.
Step-by-Step Filing Checklist
1. Verify Filing Requirement and Gather Documentation
Confirm the trust claimed a section 642(c) deduction on its 2019 Form 1041. Verify that the trust does not qualify for any exception. Collect all Forms 1099-INT, 1099-DIV, 1099-MISC, and Schedule K-1s. Compile complete charitable distribution documentation, including recipient names, addresses, amounts, and purposes. Obtain the trust instrument and accounting records, reconciling accounting income to taxable income.
2. Determine Reporting Detail Level
If your total income is $25,000 or less, skip lines 1–8 and enter your total income on line 9. If total income exceeds $25,000, complete all lines 1-8 separately with required schedules attached for business income (Schedule C), capital gains (Schedule D), rents and royalties (Schedule E), farm income (Schedule F), and ordinary gains (Form 4797).
3. Complete Part I Income and Deductions
Enter income amounts on lines 1-8 or use line 9 for simplified reporting. Line 1 reports interest income, line 2 reports dividends, line 3 reports business income, line 4 reports capital gains, line 5 reports rents and royalties, line 6 reports farm income, line 7 reports ordinary gains, and line 8 reports other income.
Complete deductions: line 10 for interest paid, line 11 for taxes, line 12 for charitable deduction with detailed purpose and payee information, line 13 for trustee fees, line 14 for professional fees, and line 15 for other deductions.
4. Complete Part II Distributions of Income Set Aside
Enter on line 16 the beginning balance of accumulated income set aside in prior years. Complete lines 17a-17e for each distribution made during 2019 from previously set-aside income, providing specific charitable purpose descriptions, complete payee names and addresses, and exact amounts. Enter the total on line 18. Calculate balance on line 19 (line 16 minus line 18). Enter the current year set-aside on line 20, matching Part I, line 12. Calculate carryover on line 21 (line 19 plus line 20). Attach continuation sheets if more than five distributions occurred.
5. Complete Part III Distributions of Principal
Enter the cumulative prior-year principal distributions on line 22. Complete lines 23a-23e for each 2019 principal distribution with detailed charitable purpose, complete payee information, and amounts. Principal distributions are for information only and do not constitute deductions. Enter the total on line 24. Attach continuation sheets if needed.
6. Complete Part IV Balance Sheets
If income is $25,000 or less, complete only lines 38 (total assets), 42 (total liabilities), and 45 (total net assets). If income exceeds $25,000, complete all asset and liability lines using the trust’s accounting method (cash or accrual) consistently. Complete both columns: (a) beginning-of-year and (b) end-of-year book values.
7. Complete Detailed Asset Lines When Required
Line 25: cash in non-interest-bearing accounts.
Line 26: savings and temporary cash investments.
Line 27: accounts receivable net of doubtful accounts allowance.
Line 28: notes and loans receivable, with an attached schedule showing borrower details, loan terms, interest rates, and security.
Line 29: inventories.
Line 30: prepaid expenses.
Lines 31-33: investments in government obligations, corporate stock, and corporate bonds with attached schedules.
Line 34: investment property (land, buildings, equipment) with an attached schedule showing the basis, depreciation, and book value.
Line 35: other investments with attached schedule.
Line 36: non-investment property with attached schedule.
Line 37: other assets.
Line 38: total assets (sum of lines 25-37).
8. Complete Liability Lines and Verify Totals
Line 39: accounts payable and accrued expenses.
Line 40: Mortgages and notes payable, with an attached schedule.
Line 41: other liabilities.
Line 42: total liabilities (sum of lines 39-41).
Line 43: trust principal or corpus.
Line 44: undistributed income and profits.
Line 45: total net assets (line 43 plus line 44).
Line 46: total liabilities and net assets (line 42 plus line 45). Verify line 46 equals line 38.
9. Ensure Detailed Charitable Purpose Descriptions
For all Part II and Part III entries, provide complete legal names of charitable organizations or specific purpose descriptions beyond general categories. Include complete street addresses, including both the city and state. Specify actual activities such as medical payments to indigent persons, university facility grants, student scholarships for specific populations, or disease-specific medical research. Verify organization names against IRS Publication 78 or the Tax Exempt Organization Search tool for accuracy and tax-exempt status confirmation.
10. Round Amounts and Verify Calculations
Round all amounts to whole dollars (drop under 50 cents, round up 50–99 cents). Verify that Part I, line 9, equals the sum of lines 1-8. Verify Part II: line 18 equals the sum of lines 17a-17e, line 19 equals line 16 minus line 18, and line 21 equals line 19 plus line 20. Verify that Part III, line 24, equals the sum of lines 23a-23e. Verify Part IV line 38 equals the sum of lines 25-37, line 42 equals the sum of lines 39-41, line 45 equals line 43 plus line 44, and line 46 equals both line 38 and line 42 plus line 45.
11. Attach All Required Schedules
Attach income schedules: Schedule C or C-EZ for business income, Schedule D for capital gains, Schedule E for rents and royalties, Schedule F for farm income, and Form 4797 for ordinary gains. Attach balance sheet schedules: a detailed schedule for line 28 notes receivable showing borrower information and loan terms, schedules for lines 31-33 listing investments with valuation methods, schedules for lines 34 and 36 detailing property with basis and depreciation, and schedules for lines 35 and 37 describing other investments and assets. Include the trust’s EIN on all schedules and clearly indicate which line each schedule supports.
12. Sign and Date the Return
The trustee or authorized officer must sign on page 2 under penalty of perjury. Enter the actual signature date. If a paid preparer completed the return, the preparer must complete the Paid Preparer Use Only section with their signature, PTIN, printed name, firm name and address, firm EIN, the self-employed box (if applicable), and telephone number. If the trustee personally completed the return or a volunteer prepared it without charge, leave the paid preparer section blank.
13. File by Deadline
Assemble pages 1 and 2, including all attached schedules, in the correct order. Verify all required schedules are included and properly labeled. Mail to Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201-0027. Postmark by April 15, 2020, or the next business day. File Form 8868 by April 15, 2020, if an extension is needed.
Extension and Amendment Procedures
To receive an automatic six-month extension until October 15, 2020, file Form 8868 by April 15, 2020. No IRS approval required. The extension applies only to Form 1041-A filing, not tax payment. To amend, complete the entire Form 1041-A again with corrections, write “Amended Return” at the top, and file it to the same address with an explanation of changes.
Record Retention
Retain Form 1041-A and all supporting documentation for seven years per section 6001. Keep accounting records, charitable receipts, trust account statements, trust instruments, amendments, all K-1s, and documentation for all claimed deductions.
Penalties
Section 6652(c)(2) imposes a $10 per day penalty, a maximum of $5,000 against the trust and $5,000 against the trustee (total $10,000) for late filing without reasonable cause. The penalty begins the day after the due date, including any extensions. Reasonable cause requires demonstrating ordinary business care and prudence; forgetting the deadline does not qualify. Separate penalties apply for false or fraudulent returns.
Important Reminders
Form 1041-A operates on a calendar-year basis only. Report all 2019 charitable activities (January 1-December 31, 2019) regardless of the trust’s fiscal year. Part III principal distributions are informational only and do not create deductions. Ensure the charitable deduction on Form 1041, line 13, matches the amounts reported on Form 1041-A, Part I, line 12, and Part II, line 20, for proper IRS verification.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
