Partnership Income Tax Guide

Partnership Tax Forms, Tax Filing Information

A Guide to Partnership Income Taxes
A Guide to Partnership Income Taxes. Peopleimages/Getty Images

Change in 2016 Partnership Tax Return Due Date

The due date for 2016 taxes (December 31 year-end) partnership tax returns is Wednesday, March 15, 2017. This is a change in due date, beginning with the 2016 tax year.) This partnership return information is also for multiple-member LLC's, which file their business tax returns as partnerships. 

If you file an application to extend your partnership tax return, it must be filed by March 15, and taxes (estimated) must be paid by that date.

The due date for an extended partnership tax return is September 15, 2017.

U.S. Partnerships and Income Taxes

This guide will take you through the top pieces of information to help you prepare for partnership taxes, including types of partnerships and how they are taxed, when and where to file, which form to use, and estimating partnership taxes.

Before you enlist the help of a CPA, Enrolled Agent, or other qualified tax preparer to prepare your partnership's taxes, there is some basic information about partnership taxes you should know. Read more about Getting Help with Business Taxes.

Multiple-member LLC's are taxed as partnerships

The information provided in this tax guide is also applicable to multiple-member limited liability companies, which are taxed as partnerships for federal income tax purposes. Read more about how LLCs pay income taxes.

Types of Partnerships

Several different types of partnerships may be formed, depending on the preferences of the partners.

A partnership can be formed as a general partnership, with all partners participating in the management, or it may have limited partners. A limited liability partnership may also be formed. All partnership types file federal income tax using the forms described below; how the individual partners are taxed depends on the type of partnership and the specific details of the partnership agreement.

Read more about types of partnerships.

Partnership Federal Income Tax Forms

Partnerships file their federal income tax returns using Form 1065. Form 1065 is an information return, meaning that no tax is imposed directly on the partnership based on information in Form 1065.

The partnership must also file a Schedule K-1 for each partner, showing that partner's distribution of the profits or losses of the partnership for that year. The Schedule K-1 is filed with the individual partner's personal income tax return for the year, and the total from the Schedule K-1 is recorded in Line 12 - Business Income. Individual partners pay income taxes on their share of the profits for the partnership. The partners must also pay self-employment tax (Social Security/Medicare) based on their share of profits, each year.

Tax Filing Documents Needed for Partnership Income Tax Return

To file your partnership income taxes, you will need to provide some financial reports and other documents to your tax preparer. These documents include a balance sheet for the beginning of the partnership's fiscal year and the end of that year, a profit and loss statement for the end of the year, information to calculate cost of goods sold, and other documents.

Here is a list of the documents needed to prepare a partnership income tax return.  

Where and How to File Partnership Income Taxes

You can file your partnership tax return on Form 1065 by mail or you can have your tax preparer e-file the return. If you are filing by mail, the address for sending in your federal tax return for a partnership depends on your state. See page 4 of instructions for Form 1065 for the mailing address for your state.

Filing an extension for partnership income taxes.

Where and how to file an amended partnership tax return.

Filing an Application for a Partnership Tax Return Extension.

State Partnership Taxes

Partners must pay income taxes on their distribution of profit in a partnership in the state or states where the partnership is located. Partnership taxes are paid on the individual partner's personal state tax returns.

More on Partnership Taxes from the IRS

The IRS web page titled Partnerships includes a description of the taxes paid by partnership businesses and the individual partners. It's worth a look if you are confused.