A Schedule K-1 is a tax form that reports the amounts that are passed through to each party that has an interest in an entity, such as a partnership, S corporation, or trust. The purpose of the K-1 form is to report each participants share of the business entitys gains, losses, deductions, credits, and other distributions (whether or not theyre actually distributed) . The K-1 form is designed to make it easier to measure the contributions of a shareholder toward the overall performance of a business.

The Schedule K-1 is slightly different depending on whether it comes from a trust, partnership, or S corporation. For example, S corporations provide a Schedule K-1 that reports each shareholder’s share of income, losses, deductions, and credits that are reported to the IRS on Form 1120S. Some trusts and estates pass income through to the beneficiaries. In these cases, the beneficiaries receive a K-1 that shows the income that they need to report on their own tax returns.

The K-1 form is filled out by the LLC or other pass-through entity, and is usually prepared by the accountant who prepares the taxes for the entity. Individual partners of an LLC do not fill out K-1s—they receive them from the partnership. K-1s are typically prepared by the LLC’s accountant and included in the partnership’s tax return, called a Form 1065. They are also distributed to each partner.

K-1s are tax forms that are used for business partnerships to report to the IRS a partner’s income, losses, capital gain, dividends, etc., from the partnership for the tax year. With the K-1, a partner’s earnings can be taxed at an individual tax rate versus the corporate tax rate. There are three different types of K-1 tax forms, which vary depending on the type of business:

• Form 1065 for partnerships
• Form 1120-S for S corporations
• Form 1041 for trusts and estates

K-1s are required to be filed with the tax returns of several different types of business entities. If the entity follows the calendar year, K-1s must be filed by March 15. If the entity follows a different fiscal year schedule, then the K-1 is due to federal tax authorities on the fifteenth day of the third month after the end of the partnership’s tax year.