What are typical tax rates on an irrevocable trust?

Typical tax rates on an irrevocable trust are 15 percent on $0 to $2,500, 25 percent on $2,501 to $5,800, 28 percent on $5,801 to $8,900, 33 percent on $8,901 to $12,150, and 39.6 percent on more than $12,150. The income tax system is progressive in that income is taxed in layers, with a higher tax rate applied to each layer, notes FederalReserve.gov.

Trustees should balance capital gains and losses to reduce the net tax burden and limit tax liabilities by bunching capital gains into a given year to avoid hitting the top bracket. It is also important for trustees to choose a quality adviser, trust tax attorney, and trust accountant, notes AltmanAssociates.net.