Tax and Payments

Line 23—Taxable Income

Line 20—Qualified Business Income Deduction To figure your QBI deduction, use Form 8995 or 8995-A, as applicable.

Use Form 8995 if:

• You have QBI (loss), real estate investment trust (REIT) dividends, or PTP income (loss);

• Your 2025 taxable income before the QBI deduction is less than or equal to $197,300; and

• You aren’t a patron in a specified agricultural or horticultural cooperative.

If you don’t meet these requirements, use Form 8995-A. Attach whichever form you use (Form 8995 or 8995-A) to your return. Also attach Schedule C, E, or F (Form 1040), whichever form you use to report information about your QBI. See the instructions for Forms 8995 and 8995-A for more information for figuring and reporting your QBI deduction.

Note: Report the beneficiary’s apportioned share of items of QBI (loss) subject to beneficiary specific determinations, W-2 wages, unadjusted basis immediately after acquisition (UBIA) of qualified property, qualified REIT dividends, and qualified PTP income on a statement attached to Schedule K-1 (Form 1041). See the instructions for box 14, code I, of Schedule K-1 (Form 1041), later.

Line 21—Exemption

Decedents’ estates. A decedent’s estate is allowed a $600 exemption.

Trusts required to distribute all income currently. A trust whose governing instrument requires that all income be distributed currently is allowed a $300 exemption, even if it distributed amounts other than income during the tax year.

Minimum taxable income. Line 23 can’t be less than the larger of:

• The inversion gain of the estate or trust, as figured under section 7874, if the estate or trust is an expatriated entity or a partner in an expatriated entity; or

• The sum of the excess inclusions of the estate or trust from Schedule Q (Form 1066), Quarterly Notice to Residual Interest Holder of REMIC Taxable Income or Net Loss Allocation, line 2c.

Net operating loss (NOL). If line 23 (figured without regard to the minimum taxable income rule stated above) is a loss, the estate or trust may have an NOL. Don’t include the deductions claimed on lines 13, 18, and 21 when figuring the amount of the NOL.

Generally, an NOL can only be carried forward to subsequent years and cannot be carried back. The 2-year carryback period only applies to the portion of an NOL attributable to a farming loss. For more information, see the Instructions for Form 172.

Complete Form 172, Net Operating Losses (NOLs), to figure the amount of the NOL that is available for carryback or carryover. Use Form 1045, Application for Tentative Refund, or file an amended return to apply for a refund based on an NOL carryback. For more information, see the Instructions for Form 1045.

On the termination of the estate or trust, any unused NOL carryover that would be allowable to the estate or trust in a later tax year but for the termination is allowed to the beneficiaries succeeding to the property of the estate or trust. See the instructions for box 11, codes E and F, of Schedule K-1 (Form 1041), later.

Excess deductions on termination. If the estate or trust has for its final year deductions (excluding the charitable deduction and personal exemption) in excess of its gross income, the excess deductions are allowed to the beneficiaries succeeding to the property of the estate or trust and retain their separate character as an amount allowed in arriving at AGI, a non-miscellaneous itemized deduction, or a miscellaneous itemized deduction. In general, an unused NOL carryover that is allowed to beneficiaries (as explained above) can’t also be treated as an excess deduction. However, if the final year of the estate or trust is also the last

Instructions for Form 1041 (2025) 29

year of the NOL carryover period, the NOL carryover not absorbed in that tax year by the estate or trust is included as an excess deduction. See the instructions for box 11, codes A and B, of Schedule K-1 (Form 1041), later.

Line 25a—Current Payment on Deferred Net 965 Tax Liability If you made a payment with respect to a current net 965 tax liability, enter the amount of the payment from column (k) of Form 965-A, Part II.

Line 25b—First Installment of Section 1062 Applicable Net Tax Liability Complete and attach Form 1062, Schedule(s) A (Form 1062), and a copy of the covenant(s) if electing to defer the payment of net income tax attributable to the gain from the sale or exchange of qualified farmland property during this tax year under section 1062. Enter the amount from Form 1062, Part III, line 15. See the Instructions for Form 1062 for more information. Also, see section 1062.

Line 27—Estimated Tax Penalty If line 28 is at least $1,000 and more than 10% of the tax shown on Form 1041, or the estate or trust underpaid its 2025 estimated tax liability for any payment period, it may owe a penalty. See Form 2210 to determine whether the estate or trust owes a penalty and to figure the amount of the penalty.

Note: The penalty may be waived or reduced under certain conditions. See Pub. 505, Tax Withholding and Estimated Tax, and the Instructions for Form 2210 for details.

Line 28—Tax Due You must pay the tax in full when the return is filed.

Making a Payment

The IRS recommends paying electronically whenever possible. Options to pay electronically include any of the payment options below. Also, go to IRS.gov/Payments to see all of your payment options.

Pay by card or digital wallet. To pay by debit or credit card, or digital wallet, go to IRS.gov/Payments . A fee is charged by these service providers.

Electronic funds withdrawal (EFW). EFW from a checking or savings account is also available to those who file electronically. Go to IRS.gov/EFW for more information.

EFTPS. Payment of the tax due may be submitted electronically through EFTPS. EFTPS is a free service of the Department of the Treasury. Go to IRS.gov/EFTPS and EFTPS.gov for more information.

Same-day wire. Payment of the tax due shown on Form 1041 may be submitted electronically through same-day wire from your financial institution. Contact your financial institution for availability, cost, and time frames. Go to IRS.gov/SameDayWire .

Paying by cash. You may be able to pay your balance due with cash at a participating retail store. Go to IRS.gov/ PayYourTaxesWithCash .

Paying by check. Make the check payable to “United States Treasury.” Write the estate’s or trust’s name, EIN, and “2025

Form 1041” on the check to assist us in posting it to the proper account. Go to IRS.gov/PayByMail for more information.

Line 30a—Credited to 2026 Estimated Tax Enter the amount from line 29 that you want applied to the estate’s or trust’s 2026 estimated tax.

Line 30b—Amount Refunded If there is an overpayment on line 30b, complete lines 30c, 30d, and 30e to enter your account information.