Finimpact

Frequently Asked Questions (FAQ)

Where can I find a sample Schedule K-1 (Form 1065)?

The best way to obtain a copy of Schedule K-1 (Form 1065) is directly from the IRS. Do so at the following link: Schedule K-1 (Form 1065)

Is partnership income considered self-employed income?

According to the IRS, involvement in any type of partnership is generally considered to be a form of self-employment and is subject to the self-employment tax. This tax, which funds the Social Security and Medicare programs, amounts to a minimum of 15.3% of taxable income.

How does 1099 income relate to a Schedule K-1 (Form 1065)?
For many partnerships, revenue is generated by providing services to other businesses. In this scenario, the revenue is often reported to the partnership (and the IRS) via Form 1099. The partnership is expected to aggregate all of its 1099 revenues and report them to the IRS via Form 1065. Then, ultimately, the partners’ shares of the Form 1065 information are reported on Schedule K-1s.
What is a K-1 distribution?
The allocation of a partnership’s profits and losses is determined based on the partnership agreement, which is a legally binding document created collectively by the organization’s partners. The actual shares of a partnership’s profits and losses are reported annually via Schedule K-1s. When profit is actually given to a partner via a cash payment or asset transfer, it is known as a distribution.
What are the other types of K-1s?

Sources:

Internal Revenue Service. (2022, March 1). About Form 1040, U.S. Individual Income Tax Return. Retrieved from https://www.irs.gov/forms-pubs/about-form-1040


Internal Revenue Service. (2021, July 12). About Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Retrieved from https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065


Internal Revenue Service. (2022, January 10). Partner’s Instructions for Schedule K-1 (Form 1065). Retrieved from https://www.irs.gov/pub/irs-pdf/i1065sk1.pdf


Internal Revenue Service. (2022, March 31). Schedule K-1 (Form 1041). Retrieved from https://www.irs.gov/pub/irs-pdf/f1041sk1.pdf


Internal Revenue Service. (2021, July 12). Schedule K-1 (Form 1065). Retrieved from https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf


Internal Revenue Service. (2022, March 2). Schedule K-1 (Form 1120-S). Retrieved from
https://www.irs.gov/pub/irs-pdf/f1120ssk.pdf

About the Authors

Thomas J. Brock

Written by: Thomas J. Brock

Chartered Financial Analyst and a Certified Public Accountant

Thomas is a well-rounded financial professional, with over 20 years of experience in investments, corporate finance, and accounting. He currently oversees the investment operation for a $4 billion super-regional insurance carrier, maintaining a dynamic investment policy designed to preserve capital, enhance profitability, and support growth.

More about me
Kal Salem

Reviewed by: Kal Salem

CPA, PMP and Finance Consultant

A CPA and finance professional working with small businesses to educate owners and grow alongside their businesses. He holds a Masters in Accounting and a BS in Supply Chain Management. Owner at Salem CPA Services LLC.

More about me
Chip Stapleton

Fact checked by: Chip Stapleton

Finance Manager

Chip Stapleton is a Series 7 and Series 66 license holder, CFA Level 1 exam holder, and currently holds a Life, Accident, and Health License in Indiana. He has 8 years of experience in finance, from financial planning and wealth management to corporate finance and FP&A.

More about me

Related Articles