Trust Income Tax Brackets

Kept in the trust

$17,723

$16,431 income tax + $1,292 surtax · 35.4% of the income

Same income, single beneficiary

$5,752

11.5% · no other income

Same income, married couple

$5,504

11.0% · filing jointly, no other income

Past $16,000, every additional dollar the trust keeps is taxed at 37% plus the 3.8% surtax. A single filer does not reach 37% until $640,600; a couple filing jointly, $768,700.

Ordinary rates only, no deductions, no state tax; the beneficiary columns assume no other income, which is the most favorable case. Income a trust distributes within its distributable net income is taxed to the beneficiary instead, which is the whole reason the contrast matters. An illustration, not a distribution decision.