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What is a schedule K1 tax form and what is it used for?
- Anonymous1 decade agoFavorite Answer
Schedule K-1 are subforms to tax form 1041 (estates and trusts), 1065 (partnerships) and 1120S (S-corps).
While these entities have their own tax forms, they can pass both income and tax liabilities through to another taxpayer (eg, YOU). The K-1 is your source document for this income and it has 2 pages. Page 1 is the $ amount, Page 2 is the breakout of *where* to put the income on YOUR 1040. If you get a K-1 without the page 2, page 2 is available online.
- Anonymous5 years ago
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So, did the partnership file or not? If the partnership filed, the IRS will have a copy of your 1065 schedule k-1 for 2006 thru 2011 on file. Just use form 4506-T to order your wage and income statements. If the partnership did NOT file, then you have a bigger problem because the partnership will be slammed with $195 fines per partner for each month it didn't file (max 12 months per year) and the IRS can try to collect from any of you. Had you gone to your preparer each year and said, what do I do when the partnership hasn't given me my k-1, the preparer would have told you, put the numbers together as best you can and let's add a form 8082 to the tax return. Then you could possibly have avoided the accuracy penalty. So what did you do? File everything but the partnership income? Finally, you do NOT substitute 1099s. Those forms would have been issued to the partnership and used to prepare the partnership return. You would not have in your name.
- 1 decade ago
Shareholder’s Instructions for Schedule K-1
Shareholder’s Share of Income, Deductions, Credits, etc.
(For Shareholder’s Use Only)
Section references are to the Internal Revenue Code unless otherwise noted.
Purpose of Schedule K-1
The corporation uses Schedule K-1 to report your share of the corporation’s income (reduced by any tax the corporation paid on the income), deductions, credits, etc. Keep it for your records. Do not file it with your tax return. The corporation has filed a copy with the IRS.
You are liable for tax on your share
of the corporation’s income, whether or not distributed. Include your share on your tax return if a return is required. Use these instructions to help you report the items shown on
Schedule K-1 on your tax return.
Your share of S corporation income is not self-employment
income and it is not subject to self-employment tax.
The amount of loss and deduction that you may claim on your tax return may be less than the amount reported on Schedule K-1. It is the shareholder's responsibility to consider and apply any applicable limitations. See Limitations on Losses, Deductions, and Credits.
Schedule K-1 does not show the actual dividend distributions the corporation made to you. The corporation must report such amounts totaling $10 or more for the calendar year on Form 1099-DIV, Dividends and Distributions.
I apologize for my original answer. It was purely bogus advice resulting from the reliance on my memory while it was experiencing an extended senior moment otherwise known as a brain fart.Source(s): IRS Shareholder's instructions for schedule K-1 in part