Form 1065—U.S. Return of Partnership Income is for reporting income, gains, losses, deductions, and credits. Since partnerships don’t pay tax on the income earned, this isn’t a tax return. This is basically similar to an information return that reports the above.
Partnerships pass through profits and losses to its partners. The partners must use the information provided on Form 1065 to include partnership items on their tax returns. That said, Form 1065 will work as a guide rather than an information return.
The following must be reported on Form 1065 for the 2021 tax season.
- Tax and Payment
Attached to Form 1065, you will find the Schedules B, K, L, M-1, and M-2.
Schedule B reports other information related to income and taxes.
Schedule K reports partners’ distributive share items.
Schedule L is works as balance sheets per books.
Schedule M-1 is the reconciliation of income per books with income per return.
Schedule M-2 is the part where partnership analysis of partners’ capital accounts.
Filing Form 1065 on your own can be quite challenging. It’s best to file it with a tax professional. If you’re going to file it by yourself, get the online fillable Form 1065—U.S. Return of Partnership Income to file in 2021 below.