How to Fill Out Schedule K-1 Tax Form

Wondering what Schedule K-1 is? Want to know how to fill out Schedule-K and how to read a Schedule K-1 like a pro? Curious, what’s the easiest and speediest way to file the form? Need to know all about the K1 deadline and other important details? In this post, we’ll cover these closely related topics and some more. 

What Is Schedule K-1

Schedule K-1 represents a schedule of tax form 1065 used by business partnership members for reporting their income, losses, and other financial details to the Internal Revenue Service. Form 1065 is used for reporting your partnership’s total net income, while Schedule K-1 is its vital addition. Based on the type of your business entity (whether it’s a partnership or an S corp with shareholders), there are various Schedule K-1 forms on the tax scene.

If you’re not sure which Schedule K-1 form type suits your individual situation best, we recommend that you contact your bookkeeper for help. Now that your ‘What is a Schedule K-1?’ question is answered, it’s time to switch to the topic of how to fill out Schedule K-1. Before we proceed, here are the details on where you can get a K-1 tax form. Finding the form via the PDFLiner database is as easy as ABC. And the platform allows you to fill out and file the form electronically, too.

Schedule K-1 Form 1065: Instructions & Details on Filling Out

All partnerships are obliged to submit the IRS Schedule K-1 form 1065. A partnership is represented by a business organization that consists of two or more business owners and their employees. Each partner within this business entity must report their part of income/losses on their personal income tax return and, thus, pay income tax in accordance with the reported data.

With regard to the partnership itself, it does not pay tax. The partners do that with the help of their personal returns. But each partnership is obliged to submit the informative Form 1065 for the purpose of reporting the organization’s overall earnings, losses, deductions, or gains. One 1065 must be filed for each member of the partnership.
Partnerships are usually represented by:

  • domestic organizations;
  • LLCs ranked as partnerships for federal income tax purposes;
international partnerships that receive U.S.-related earnings.

How to Fill Out & Read Form 1065 Schedule K-1: Instructions

Luckily, Form 1065 Schedule K-1 is a one-pager. It consists of 3 parts. The first one requires details about your organization. The second one requires details about a partner/shareholder. And the third part of the tax form is where you indicate the partner’s/shareholder’s financial details in detail.

Along with your company's earnings and losses, a Schedule K-1 features sections that report capital gains, dividends, deductions, credits, and rental real estate income. Make sure you gather all the necessary documents in advance to keep all those important details handy prior to sorting out the Schedule-K tax form.

If you’re an employee of a partnership, you will need to indicate your employer’s identification number, the type of partnership you’re involved with, your share of income and losses throughout the tax year, as well as your share of liabilities throughout the tax year. For claiming your deductions or credits, make use of the form’s boxes 12, 13, and 15.

Schedule K-1 also contains the following details to fill out:

  • foreign payments;
  • alternative minimum tax items;
  • tax-exempt earnings and nondeductible expenses;
  • distributions (finances sent to other membership partners throughout the tax year).

In case you’re an S corporation shareholder, including the details about your share of earnings or losses is unnecessary. You’ll just need to indicate the percentage of stock you owned throughout the tax year. Make use of the F box to complete this important mission. Remember that if you’re not sure how to fill the whole thing out under your own steam, you can always hire a bookkeeper for maximum convenience and efficiency.

Needless to say that the most effortless and convenient way to fill out Schedule K-1 is via PDFLiner. Here, you can easily find the Schedule K-1 example template, edit it as much as you want to refine the final version digitally (read as paperlessly and error-lessly!), e-sign it, and e-file it. This service saves heaps of your time and automates your workflow as nothing else does. Alternatively, you can also find the Schedule K-1 (Form 1065) template via the IRS official website.

How to File Schedule K-1

The partnership or S corporation should have sent you a K-1. The easiest way to file your Schedule K-1 form is by making the most of a reliable tax filing platform (e.g., PDFLiner). Alternatively, you can file the form by mail. You may find all the calculations related to the form way too challenging and time-consuming. Don’t hesitate to hire an expert to help you with the whole thing and have your Schedule K-1 form e-filed to the Internal Revenue Service. Don’t forget that your personal tax return won’t be accepted without the Schedule K-1 form attached.

FAQ

To save your time reading the whole post, take a look through our answers to some of your most frequently asked questions below.
Customer:
When is Schedule K-1 due?
Support:
The form is due on a yearly basis, on the fifteenth day of the third month after each tax year. In case the due date falls on a weekend or a federal holiday, the deadline typically moves to the next business day. 
Customer:
Where do I report K-1 income?
Support:
You report your share of the partnership’s income in the third section of the document, along with the losses, deductions, credits, and any other finances related to the partnership you’re involved in. 
Customer:
How to understand a K-1 form?
Support:
Understanding the basics of Schedule K-1 is fairly easy. You fill it out as part of Form 1065 (your Partnership Tax Return), the form used for reporting your company’s total net income. In case you face difficulties filling out the form, hiring professional help is the wisest choice. Completing and submitting the form online via PDFLiner is among the fastest and most convenient ways to file Schedule K-1.
Customer:
What happens if I don’t file my K-1?
Support:
Always remember that you can’t file your individual income tax return without your K-1s. In case you fail to submit your Schedule K-1, you will face penalties imposed by the Internal Revenue Service.

Printable Blank Schedule K-1 Form 1065