Partnership Tax Preparation & Filing

Partnerships are designated as pass-through taxation entities meaning that their profits or losses are passed directly to and reported on the individual owners (partners) tax returns. While Partnerships don’t directly pay taxes they still must file Form 1065 & Schedule K-1 with the IRS. Avoid the headache and potential consequences of mistakes by using one of our certified tax professionals to prepare your Partnership tax filings.

What are the benefits of professional tax preparation for my Partnership?

Ease the burden

Some tax returns can be complicated. A small-business owner who itemizes his deductions has to complete and file IRS 1040, Schedule A, Schedule C and Schedule SE, among other forms.

Reduce Errors

While we are all human and not perfect, the chances of making a simple mistake on a return are reduced when you use a professional tax service.

Professional Tax Advice

The tax rules are complicated. Before you can use a deduction or credit, you must qualify for it. A tax professional can help find deductions and credits for which you qualify for, and can provide advice.

Avoid Adverse Consequences

When you sign the end of your tax return, you declare that the information is true and accurate to the best of your knowledge. Having a professional prepare your tax return adds a little safeguard to potential liability.

Partnership Tax Preparation FAQs

  • When are Partnership Income Tax Returns Due?
    Form 1065, along with the partners’ individual Schedule K-1 forms, is due March 15 of the year following any given tax year. If March 15 happens to fall on a weekend or holiday, the next business day becomes the due date. An application for an extension is for six months, so then taxes should be filed by September 15.
  • Do I have to pay Self-Employment Taxes for a Partnership?
    If you are actively operating your partnership, the Internal Revenue Service expects that all taxes on self-employment income be paid by you, as well as income taxes. These are taxes from your salary that are based on deductions for the Social Security Administration, as well as for Medicare. These are just like the taxes that are taken out of every employee’s check. However, some differences exist between the deductions from a regular employee’s check and those of partners’. Because they are not withheld from the income that partners receive, partners must pay these taxes along with standard income taxes. Also, partners must pay double the amount that regular employees do, because employers match their employees’ contributions. After a partner deducts all expenses from his business income, it will greatly reduce the profits that must be reported to the Internal Revenue Service. Expenses that are deductible include any business-related expense, such as start-up costs, costs for traveling on business, operating expenses, in addition to outlays for advertising. Partners may also deduct a percentage of what they spend on business-related meals and entertainment as well.
  • Are Profits Are Taxed Whether Partners Receive Them or Not
    The Internal Revenue Service requires that partners each their income taxes according to their “distributive share.” Distributive share is a term meaning the amount of company profits to which each partner is entitled, depending either on a partnership agreement or state law. The Internal Revenue Service acts on the premise that each partner has, in fact, received their distributive share each year. Therefore, partners must pay taxes based on that amount, no matter how much they actually withdrew from the business in any given year.

File you business taxes with ease!

To learn more about working with a tax professional to file your business tax returns complete the form below