Schedule K‑1 is a tax form used to report an individual’s share of income, deductions, credits, and other tax items from a pass‑through entity.
Pass‑through entities generally do not pay income tax at the business level. Instead, tax items are passed through to owners or beneficiaries, who report them on their personal or business tax returns.
📂 Types of Schedule K‑1 Forms
There are three main types of Schedule K‑1 forms, depending on the type of entity issuing them.
1️⃣ Schedule K‑1 (Form 1065)
- Entity Type: Partnership or LLC taxed as a partnership
- Recipient: Partners or LLC members
- Reports:
- Share of partnership income or loss
- Deductions and credits
- Capital account activity
- Filed With: Form 1065 – U.S. Return of Partnership Income
2️⃣ Schedule K‑1 (Form 1120‑S)
- Entity Type: S Corporation
- Recipient: Shareholders
- Reports:
- Share of S corporation income or loss
- Deductions and credits
- Distributions
- Basis‑related items
- Filed With: Form 1120‑S – U.S. Income Tax Return for an S Corporation
3️⃣ Schedule K‑1 (Form 1041)
- Entity Type: Estate or Trust
- Recipient: Beneficiaries
- Reports:
- Income distributed to beneficiaries
- Items such as interest, dividends, and capital gains
- Filed With: Form 1041 – U.S. Income Tax Return for Estates and Trusts
💡 Key Notes for All Schedule K‑1 Forms
- Each Schedule K‑1 contains boxes and codes that indicate how and where items are reported on the recipient’s tax return.
- K‑1 income may require additional forms, such as:
- Schedule E
- Schedule D
- Form 1116 (Foreign Tax Credit)
- Form 6251 (AMT)
- K‑1s are often issued later than W‑2s or 1099s, because they depend on the entity completing its own tax return.
- Even if no cash was received, K‑1 income may still be taxable.
🛑 Filing Support Notice
- 🚫 We do not support preparing or filing the business returns associated with Schedule K‑1 forms:
- Form 1065
- Form 1120‑S
- Form 1041
- ✅ We do support entering Schedule K‑1 information on the recipient’s tax return.