What Information Do I Need to File Form 1065 for a Partnership?

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If you are the person responsible for income taxes for a partnership, you probably already have a tax preparer to help you with this return. Or maybe you are planning to use a tax preparation software program that has a partner version. In either case, it's a good idea to gather up the documents you will need to prepare this partnership tax return.

Having these documents before you begin lessens the work and time (and money!) spent on a tax preparer and it reduces the hassle of stopping and starting your return.

First, a brief overview of a partnership tax return, then a list of documents you will need. 

How Partnerships File Federal Income Taxes - Form 1065

Form 1065 is the U.S. Return of Partnership Income. Form 1065 is used by partnerships and multiple-member Limited Liability companies (LLCs) to report federal income taxes. No tax is calculated or paid from Form 1065. any tax due is paid by the partners or LLC members. A multiple-member LLC is taxed as a partnership.

A partnership pays income tax through the returns of its partners, allocating share of income or loss to each partner according to the terms of the partnership agreement. The partnership files an information return on Form 1065, then gives each partner Schedule K-1 showing his or her share of income/loss for the year.

Information for Multiple-member LLC's Filing as Partnerships

If your business is an LLC with multiple members, and you have not elected to be taxed as a corporation or S corporation, you'll be filing taxes as a partnership.

There is nothing different about the forms you'll need

Documents Needed for Your Partnership Tax Return and Schedule K-1 Forms

To start out your preparation for filing Form 1065, you will need several year-end financial statements. Give your tax preparer a P&L (profit and loss, or income) statement, showing your corporate income, with specific sources of revenue, and all deductible expenses of the partnership/LLC for the year and a balance sheet for the partnership at the beginning and the end of the year.

The beginning year balance sheet must match last year's end-of-year balance sheet.

Before you take your partnership tax information to a tax preparer, gather together the following information:

Information about the partnership, including the Employer ID numberbusiness code (NAICS code), and the date the partnership was started.

The accounting method used by the partnership - cash or accrual

Total gross receipts, returns and allowances

If you sell products, information to calculate cost of goods sold

Information on Expenses of the Partnership

Information on your business assets

You will need to provide information on your business asset records, including business vehicles, for depreciation purposes.

Information Needed for Schedule K-1 Forms

 Schedule K-1 provides information about the partnership and the partners, including taxable income of partners from passive activities and other activities, qualified dividends, net capital gains, and income from other activities.

 Before preparing this form, your tax preparer will need a copy of your partnership agreement to provide information on the distributions of shares or money to partners, and allocation of income/loss to partners. 

You will also need a list of partners and their partnership type (general or limited).  

Most important, you will need Information on distributions and contributions by partners for the tax year, including the total amount of all partner capital accounts at the beginning and the end of the year and increases and decreases (including distributions)

Get more information on partnerships and multiple-member LLC taxes.

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