What IRS Form 1041-QFT (2024) Is For

Form 1041-QFT is the U.S. Income Tax Return for Qualified Funeral Trusts (QFTs), used by trustees who elect special tax treatment for pre-need funeral trusts under IRC Section 685. A QFT is a domestic trust created through contracts with funeral service providers to hold and invest funds exclusively for funeral or burial services of designated beneficiaries (IRS Instructions for Form 1041-QFT (2024)).

When You'd Use Form 1041-QFT for 2024 (Late or Amended Filing)

You would file a late 2024 Form 1041-QFT if the April 15, 2025 deadline was missed and the IRS issued notices about unfiled returns or unpaid balances. Trustees may also file late after discovering overlooked income or deduction errors. For amended filings, the form is used to correct original submissions. Refund claims generally must be made within three years of the due date or two years from payment.

Key Rules Specific to 2024

• Calendar year required with April 15, 2025 due date.
  
  
• Tax brackets: 10% up to $3,100; 24% $3,100–$11,150; 35% $11,150–$15,200; 37% over $15,200.
  
  
• Capital gains top rate of 20% applies to income above $15,450.
  
  
• Net Investment Income Tax (3.8%) applies to undistributed investment income exceeding thresholds.
  
  
• Composite returns require separate per-beneficiary tax calculations.
  
  

Step-by-Step (High Level)

• Gather Records: Collect 2024 income documents (Forms 1099, investment records, etc.) and IRS account transcripts.
  
  
• Prepare Form 1041-QFT: Use the official 2024 version, ensuring “2024” is entered in the calendar year field.
  
  
• Attach Required Schedules: Schedule D for capital gains, Form 8960 for NIIT, and detailed beneficiary statements for composites.
  
  
• File and Pay: Mail to IRS Kansas City, MO 64999 or check for e-filing availability.
  
  
• Retain Copies: Keep all filed documents, proofs of mailing, and payment records.
  
  

Common Mistakes and How to Avoid Them

• Not filing when required: QFTs with $600+ gross income must file.
  
  
• Beneficiary reporting errors: Composite returns require detailed schedules for each beneficiary.
  
  
• Estimated tax oversights: QFTs expecting $1,000+ liability must pay quarterly estimates via Form 1041-ES.
  
  
• Wrong tax rates: Apply 2024 QFT brackets, not individual or corporate rates.
  
  
• Missing NIIT reporting: Use Form 8960 when thresholds are exceeded.
  
  
• Poor record-keeping: Maintain per-beneficiary income and deduction records.
  
  

What Happens After You File

IRS processing typically takes 6–8 weeks for paper and 3–4 weeks for electronic filings. Delays are common for late or amended returns. Trustees receive notices confirming acceptance, refunds, or balances due. Penalties accrue at 5% monthly (up to 25%) for late filing, plus 0.5% per month for late payment. Installment plans are available through Form 9465. Trustees may appeal IRS adjustments through the Office of Appeals if disagreements arise.

FAQs

Can I still file Form 1041-QFT for 2024 even though it's late?

Yes. The IRS accepts late-filed returns, and trustees are encouraged to file promptly to minimize penalties and interest. Failure to file compounds financial liability, even if no tax is due. Submitting the form late still establishes compliance and reduces the likelihood of continued IRS notices or enforcement actions regarding the trust.

How are penalties calculated for late filing?

Late filing penalties are 5% of unpaid tax per month (or partial month) up to 25%. Late payment penalties add 0.5% per month, also capped at 25%. Both penalties accrue interest from the April 15, 2025 due date. Filing the return even without payment reduces late-filing penalties, so it’s better to submit promptly.

Do I need account transcripts before filing a late return?

No, but obtaining them is highly recommended. IRS transcripts provide prior payment details, notices, and income information, helping trustees confirm all credits and ensure accuracy. This avoids overstating balances due or missing refunds. Transcripts can be requested through IRS.gov, by phone, or using Form 4506-T. Having transcripts improves filing accuracy.

What's the deadline for claiming refunds on 2024 QFT returns?

Refund claims generally must be filed within three years of the due date (April 15, 2028) or two years from when taxes were paid, whichever is later. Filing within this statute ensures refunds are not forfeited. After that date, refund eligibility typically expires, even if the trust overpaid tax or made excess estimated payments.

Can I electronically file Form 1041-QFT?

Possibly. The IRS has expanded e-filing options in recent years, but availability depends on approved software and year-specific acceptance. For 2024, check IRS.gov or professional tax software for e-file status. If e-filing is unavailable, trustees must mail paper returns to the Kansas City, MO IRS center. Use certified mail for proof.

If I file an amended Form 1041-QFT, do I also need to amend state returns?

Yes, in most cases. Many states conform to federal filing and require amended state filings whenever federal corrections are made. State rules differ, so trustees should verify with the relevant tax authority. Failing to file amended state returns when required can result in additional penalties, interest, or denial of deductions at the state level.

How do I handle composite returns with multiple beneficiaries?

Each beneficiary’s interest is treated as a separate QFT for tax purposes. If filing a composite return, the trustee must attach a detailed statement showing each beneficiary’s income, deductions, and tax separately. Total liability is then calculated by summing per-beneficiary tax amounts, not by applying tax brackets to the composite’s combined income.

‍