The IRS defines a tax partnership as "the relationship between two or more people to do trade or business. Each person contributes money, property, labor or skill, and shares in the profits and losses of the business."
Publication 541, Partnerships, provides information on forming a partnership, making partnership distributions, understanding exclusion rules, and ending a partnership.
A partnership does not pay income tax, instead, the partnership must file an annual information return where the profits and losses are passed onto to each partner, who in-turn report their share of the partnership profit and loss on their own personal income tax.
Each partner receives a Schedule K-1 (Form 1065). For information and deadlines refer to the IRS.gov link About Form 1065, U.S. Return of Partnership Income.
Some of the most common forms used in partnerships provided by IRS.gov are linked below.
Annual Return of Income
Employment Taxes
Employment taxes may include Social Security and Medicare taxes and income tax withholding.
- Form 941, Employer's Quarterly Federal Tax Return
- For farm employees: Form 943, Employer's Annual Federal Tax Return for Agricultural Employees
- Federal unemployment (FUTA) tax: Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return
- Employment taxes: Depositing and Reporting Employment Taxes
Excise Taxes
Refer to Excise Tax for more information.
- Form 965-A, Individual Report of Net 965 Tax Liability
- Form 8990, Limitation on Business Interest Expense Under Section 163(j)
Forms for Individuals in Partnerships
If you are an individual in a partnership, you may need to file the forms below.
Income Tax
- Form 965-A, Individual Report of Net 965 Tax Liability
- Schedule E (Form 1040), Supplemental Income and Loss
- Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors
Self-employment Tax
- Schedule SE (Form 1040), Self-Employment Tax
- Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors
Estimated Tax
International Tax
- Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations and related schedules
- Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR)
- Form 8288, U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests
- Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships
If you have questions about tax partnerships, reach out to the business tax experts at Peter Witts CPA PC. With over 20 years of experience, our dedicated team has a wealth of knowledge and expertise in navigating the intricacies of tax partnerships. We understand the complexities involved in structuring and managing partnerships from a tax perspective, and we are here to provide comprehensive guidance tailored to your specific needs. Whether you're looking to establish a partnership, assess tax implications, optimize tax strategies, or address any tax-related challenges that may arise, our seasoned professionals will guide you every step of the way. We stay up to date with the latest tax regulations and leverage our extensive experience to ensure compliance and maximize tax savings opportunities for your partnership.
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