Form 1065 is an IRS form that partnerships use to report their income. Partnerships do not pay income on gains or losses, but instead these are passed through the business to the partners.
Below you'll find form 1065 instructions, as well as frequently asked questions.
How to Fill Out Form 1065:
1. Gather your financial data.
Before you start filling out form 1065, make sure that you have all of your financial statements in front of you. The form requires a detailed financial picture of your partnership, so you will need to refer to these numbers as you work through it. If your accountant is filling out the form on your behalf, make sure that he or she has all of the necessary information.
2. Identify your partnership.
The top of the form asks for the name of your partnership, the registered address, your employer identification number, and several other identifying pieces of information. Be sure to fill this portion out accurately so that the IRS can correctly identify your business.
3. Record income and deductions.
The first page of the form asks you to list the specifics of your income and deductions in the applicable fields. This includes your gross profit, net profit, cost of goods sold, rent payments, etc. The bottom of this page must be signed and dated by a partner or LLC member.
4. Work through schedules B, K, L and M.
The remaining sections of the form ask for more information about the structure of your business and your financial status. You will be asked to include numbers from your balance sheets for the beginning and end of the year in question, and in Schedule K you will be asked to disclose more information about your income, deductions, and any foreign transactions.
5. Review and make sure the form is signed.
As mentioned above, the first part of the form must be signed by a partner or LLC member. In addition, page 3 must include the contact information for the designated Tax Matters Partner (TMP). The TMP is a partner in the business who has been designated to handle the tax proceedings, should the need for either an audit or further clarifying information arise.
6. Submit the form with your taxes.
Form 1065 should be submitted with your other tax information when you file your business tax return. For more information on where to send your forms, irs.gov/filing/where-to-file-your-taxes-for-form-1065 and locate the address that corresponds to your business location.
Form 1065 FAQs:
Is there a late filing penalty for Form 1065?
Form 1065 must be filed by March 15th in the year following the tax year that it is being submitted for. A penalty of $195.00 will be incurred for each month that the form it late, up to a maximum of 12 months.
What is the Form 1065 K-1?
Schedule K-1 is part of tax form 1065. K-1 is where each partner's share of the partnership income and their deductions are listed. Each partner can use the information on schedule K-1 when they are filing their own personal income taxes.
Can an LLC use Form 1065?
Yes, the LLC 1065 form is intended for limited liability companies that operate as partnerships. If your LLC is a partnership, then you can use the IRS 1065 form when you file your taxes.