Tax Season FAQ for High-Net-Worth Households

During tax season, it’s natural to have questions about your filing requirements. Even more so when you are part of a high-net-worth household. Generally, the more wealth you accumulate the more types of assets you have, which can mean additional tax documents and forms are required for filing each year.

In this article, we’ll shed some light on what tax forms and timelines you can expect as a high-net-worth individual or household and cover some additional frequently asked questions that often come up during tax season.

1. What are the tax brackets and federal income tax rates for 2024?

Please see the table below for 2024 federal income tax brackets and rates.

Tax rate	Single	Married filing jointly	Married filing separately	Head of household
10%	$0 to $11,600	$0 to $23,200	$0 to $11,600	$0 to $16,550
12%	$11,601 to $47,150	$23,201 to $94,300	$11,601 to $47,150	$16,551 to $63,100
22%	$47,151 to $100,525	$94,301 to $201,050	$47,151 to $100,525	$63,101 to $100,500
24%	$100,526 to $191,950	$201,051 to $383,900	$100,526 to $191,950	$100,501 to $191,950
32%	$191,951 to $243,725	$383,901 to $487,450	$191,951 to $243,725	$191,951 to $243,700
35%	$243,726 to $609,350	$487,451 to $731,200	$243,726 to $365,600	$243,701 to $609,350
37%	$609,351 or more	$731,201 or more	$365,601 or more	$609,351 or more

Source: IRS Federal income tax rates and brackets | Internal Revenue Service*

2. What federal tax forms will I receive and what do I need to file?

Depending on the types of assets you have, the tax forms you will receive and the forms you’ll need to file can differ. Please find below a guide of several tax documents and forms that are commonly received and required to file by high-net-worth households.

Estates and Trusts

Estates and non-grantor trusts are generally required to file a Form 1041 (U.S. Income Tax Return for Estates and Trusts) if the gross income is $600 or more for the tax year. If you are unfamiliar with a Form 1041, it can be helpful to compare this to the Form 1040 required for an individual’s income taxes. Trusts and estates are subject to the highest marginal income tax rates on undistributed income over $15,200 (for tax year 2024)—a much lower threshold than for individuals.  Because of this, it is common for trusts and estates to distribute most or all taxable income to beneficiaries each year.

If you are a beneficiary of a trust and/or estate filing a Form 1041, you can expect to receive a Schedule K-1 if you received distributions from the trust and/or estate during the previous tax year. The Schedule K-1 is used to report the share of income and deductions allocated to you as a beneficiary to be reported on your Form 1040 (U. S. Individual Income Tax Return). The Schedule K-1 can be a useful tool to see further detail about the income received from the trust and/or estate (ordinary income, interest income, capital gains). This information can be shared with your CPA or tax preparer to identify thoughtful tax planning strategies.

IRA Owners

Individual Retirement Account (IRA) owners will receive a Form 1099-R, which details distributions made during the prior year.  These distributions are generally taxed as ordinary income for federal taxes.  Depending on your state of residency, IRA distributions may also be subject to state income tax.

IRA owners will also receive a Form 5498, which includes information submitted to the IRS by the IRA trustee or custodian to report contributions, including catch-up contributions, rollovers, repayments, nd the fair market value of the account each year. Because individuals can still make IRA contributions until April 15 to be counted for the prior year, Form 5498 is not due to recipients until May 31, so this form can arrive later than other tax documents you may receive.

Investment Agency Clients (Taxable Non-Qualified/Non-Retirement Accounts)

Holders of these accounts will receive a 1099 tax form outlining dividends, interest and capital gains or losses for the prior year. Note that interest income earned from savings accounts, money market deposit accounts, and CDs is typically subject to federal income tax. Your interest income tax rate varies based on several factors including overall income level and filing status. Generally, interest income is taxed at your ordinary income tax rate. Dividends fall into two main categories—qualified and ordinary.  Qualified dividends are typically taxed at long-term capital gains rates. Ordinary dividends and short-term capital gains are generally taxed at the same rate as ordinary income.

3. When will I receive my tax documents?

While many tax documents are sent in January for the prior year, like W-2s and certain types of 1099s, some documents can take longer to receive. The table below shows general timelines when certain tax documents are often issued and when they are due to the recipient.

Tax Document	Month Tax Documents Will Begin to be Issued	Date Tax Documents Due to Recipient
1099-R or 1099-NEC	January	January 31
1099-DIOB	February	March 15
Grantor Letter or Schedules K-1 without specialty holdings	February	April 15
Grantor Letter or Schedules K-1 with specialty holdings	February	April 15
5498	May	May 31

Note: These dates may differ depending on the financial institution you are working with.

4. When is the right time to meet with my tax preparer?

Generally, you want to wait to meet with your tax preparer until you’ve acquired all the tax documentation you expect to receive for the prior year. This ensures your tax preparer will be working from exact figures and lessens the likelihood you’ll need to file an amended return to make a change or adjustment to a return already filed.

5. Do I need to file for an extension?

You can file for a tax return extension by the April 2025 tax filing due date. Doing so then gives you until October 15, 2025 to file without penalties. However, the extension only applies to filing your return; you will still need to pay any tax you owe by the April 2025 due date.

If you think an extension may be right for your tax circumstances, talk to your tax preparer. Learn more about tax return extensions.*

6. What are some other things to consider at this time of year?

In addition to filing your taxes, now can be a great time to review your broader estate and tax planning strategies since you will likely be in contact with professionals like your CPA or financial advisor. Be sure to ask about recent or upcoming law changes or other trends that may impact your plans and identify how to adjust them.

One example of an upcoming change to keep on your radar is the Federal Estate and Gift Tax Exemption, which is set to sunset on January 1, 2026. Currently, the combined federal estate and gift tax exemption amount of $13.99 million per person or $27.98 million per married couple is set to revert to 2017 levels in 2026 unless Congress acts to extend the sunset date. Adjusted for inflation, the single taxpayer limit would drop back to an estimated $7 million, approximately half of the current levels. Those considering making substantial gifts should be in touch with their attorney and financial professionals to determine if gifting should be finalized in 2025 due to the approaching sunset date.

7. What can I do to ensure a smooth tax season process?

Lastly, if you are feeling overwhelmed by the complexity of your taxes, consider consolidating your accounts to one, or fewer, financial institutions. Often, the more financial institutions you work with and accounts you have, the more tax forms you’ll receive. Consolidating financial institutions can help alleviate some of the stress that can come at this time of year.

While tax preparation can be tedious, understanding timelines and expectations can help to ensure a smooth process. Be sure to lean on your CPA or tax preparer for questions or concerns.

This article is for informational purposes only and is not intended as legal, tax, or investment advice. You should consult with qualified professional advisors regarding your own situations.

Non-deposit investments are not FDIC insured and may lose value. All investments involve risk, including the possible loss of principal.

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