THE SAUGUS ADVOCATE – FRIDAy, JAnUARy 23, 2026 Page 9 Savvy Senior TRUST INCOME TAX RETURNS FOR 2025 TAX YEAR F or this upcoming tax season, whether you have previously executed a revocable trust or irrevocable trust, it is important to know the Trust income tax return filing requirements. If you have executed a revocable Trust, it will be treated as a grantor-type Trust and therefore no separate tax return will be required to be filed for the Trust. If you were to open a stock brokerage account or money market account in the name of such a trust, for example, you can have the bank or financial institution simply use your social security number for IRS 1099 reporting purposes. Upon your death as the Settlor of such a revocable Trust, the Trust would then become irrevocable and would no longer be classified as a grantor-type trust. In such an event, if the Trust generates income, whether interest, dividend, capital gain income, or net rental income from rental real estate, then a separate Trust tax return would need to be filed. Furthermore, the Trustee would have to file for a federal ID number for the Trust with the IRS. If the Trust does not distribute its income, it will have to pay taxes at the Trust level. The highest tax bracket for Trusts of 37 percent starts at only $15,650 in taxable income. Therefore, it is often more desirable to distribute the income to the income beneficiaries in order to claim an income distribution deduction provisions that would need to be included in the irrevocable Trust in order for it to be treated as a grantor-type Trust for tax purposes. Since the irrevocable Trust is drafted to be treated as a at the Trust level to zero out the Trust’s taxable income. The income will then be taxed to the income beneficiaries who actually receive the distribution on their individual income tax returns. For the 2025 calendar year, the 22 percent tax bracket for a married couple does not begin until taxable income reaches $96,950. The 37 percent tax bracket for the same couple does not begin until taxable income reaches $751,600. With a Medicaid irrevocable Trust executed for asset protection purposes, a tax return would have to be filed by the Trust under its federal ID number in the event it generates taxable income. The Trust should be drafted in such a way as to be treated as a grantor-type Trust. If this Trust is generating taxable income, there would then be a grantor letter issued to the Settlor/ Grantor/Trustor of the Trust in order for that person to report the items of income on his or her individual income tax return. There are several Trust grantor-type Trust, it does not matter if interest income, dividend income, capital gain income or net rental income is actually distributed to the Grantor. Those items of income will pass through to the Grantor of the Trust via the grantor letter and will be reported on his or her Form 1040. The Trust will not be paying the income taxes on the income it generates. Upon the death of the Settlor of the irrevocable Trust, the Trust will no longer be treated as a grantor-type Trust. Consequently, any net income generated by the Trust will be taxed at higher Trust income tax rates unless the net income is actually distributed to the income beneficiaries or remainder beneficiaries. For this upcoming tax season, be aware of the income tax rules pertaining to revocable and irrevocable Trusts when determining whether or not a tax return needs to be filed, and if so, which type of Trust income tax return. Joseph D. Cataldo is an estate planning/elder law attorney, Certified Public Accountant, Certified Financial Planner, AICPA Personal Financial Specialist and holds a masters degree in taxation. by Jim Miller How To Find a Quality Nursing Home for Your Loved One Dear Savvy Senior, Can you give me some tips on picking a good nursing home for my father? Since his stroke, I’ve been taking care of him at home, but he’s gotten to the point where it’s too much for me to handle. Exhausted Daughter Dear Exhausted, Choosing a nursing home for a loved one that provides quality is a very important decision that requires careful evaluation and some homework. Here are some steps you can take that can help you find a good facility and avoid a bad one. Make a list: There are several sources you can turn to for referrals to top nursing homes in your area including the Area Agency on Aging (call 800-6771116 or visit Eldercare.acl.gov for contact information); your dad’s doctor or nearby hospital discharge planner; friends or neighbors who may have had a loved one in a nursing home; and online at Medicare’s nursing home compare tool at Medicare.gov/ care-compare. This tool will not only help you locate nursing homes in your area, but it also provides a 5-star rating system on recent health inspections, staffing, quality of care, and overall rating. Also, keep in mind that it’s always best to choose a nursing home that’s close to family members and friends who can visit often, because residents with frequent visitors usually get better care. Call your long-term care ombudsman: This is a government official who investigates nursing home complaints and advocates for residents and their families. This person can tell you which nursing homes have had complaints or problems in the past and can help you locate a good facility. Visit LTCombudsman.org for local contact information. Contact the nursing homes: Once you’ve narrowed your search, call the nursing homes you’re interested in to verify that they can facilitate your dad’s needs. Also, find out if they have any vacancies, what they charge, and if they accept Medicaid. Tour your top choices: During your nursing home visit, notice the cleanness and smell of the facility. Is it homey and inviting? Does the staff seem responsive and kind to its residents? Additionally, be sure to taste the food, and talk to the residents and their family members, if available. It’s also a good idea to visit several times at different times of the day and different days of the week to get a broader perspective. And be sure to find out about their staff screening and training procedures, staff-to-patient ratio, and the staff turnover rate. To help you rate your visit, Medicare offers a helpful checklist of questions to ask at Medicare.gov/ media/document/12130nursing-home-checklist508.pdf that you can print and take with you on your visit. Paying for Care With nursing home costs now averaging $324 per day nationally for a semi-private room and nearly $371 for a private room, paying for care is another area you may have questions about or need assistance with. Medicare only helps pay up to 100 days of rehabilitative nursing home care, which must occur after a hospital stay of at least three days. Most nursing home residents pay for care from either personal savings, a long-term care insurance policy, or through Medicaid once their savings are depleted. Or, if your dad is a veteran, he may be able to get funds through the VA’s Aid and Attendance benefit (see VA.gov/pension/aid-attendance-housebound). To learn more about the payment options, ask the nursing home director. You can also get help from your State Health Insurance Assistance Program (SHIP), which provides free counseling on all Medicare and Medicaid issues. To find a local SHIP counselor visit ShipHelp.org or call 877839-2675. And for more information, see Medicare’s booklet “Your Guide to Choosing a Nursing Home” (product # 02174). You can view it online at Medicare.gov/Publications. Send your questions or comments to questions@savvysenior.org, or to Savvy Senior, P.O. Box 5443, Norman, OK 73070.
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