What Is a K1 for Taxes?

Schedule K-1 is a form that passes income and expenses from one entity to an individual

Schedule K-1 is provided to members of either a partnership or S-corporation. Schedule K-1 is also provided to beneficiaries of a trust or an estate. Schedule K-1 will disclose each individual's share of the entities distributions for the year. The taxpayer who receives a Schedule K-1 must file her income taxes and report income, expenses and deductions on the Schedule K-1.

Form 1041 Schedule K-1

Form 1041 Schedule K-1 is used for beneficiaries of an estate or trust. The income, expenses, credits and deductions from the estate or trust disperses to individual beneficiaries. The estate or trust then files a Schedule K-1 for each beneficiary and sends the beneficiary a Schedule K-1.

Form 1065 Schedule K-1

Form 1065 Schedule K-1 is for partnerships. Partnerships must file Form 1065 each year. Then the partnership must distribute Form 1065 Schedule K-1 to each individual partner. Schedule K-1 records the income, deductions and credits of the individual partner.

Form 1120S Schedule K-1

Form 1120S Schedule K-1 is for S-Corporations. S-Corporations must file Form 1120S and distribute Schedule K-1 to the owners of the corporation. Schedule K-1 records the income, deductions and credits of the individual owner in the S- Corporation.

Part I

Part 1 provides information on the entity such as its name and address. This is basic information to identify from where the income, credits and deductions are coming from for the taxpayer. This also allows the Internal Revenue Service to fully account for income of the entity.

Part II

Part II provides the information of the person receiving the form. This includes the name and address of the person receiving the form. The rest of the information varies, depending on the form that goes with the Schedule K-1.

Part III

Part III of Schedule K-1 discloses any income, expenses and other deductions that passes through to the partner. This is includes items such as business income, royalties, interest income and Section 179 deductions. The person receiving Schedule K-1 must report these amounts on his income tax return for the year.

References

• IRS: Form 1120S Schedule K-1
• IRS: Form 1065 Schedule K-1
• IRS: Form 1041 Schedule K-1