There are many types of tax filing forms in the U.S., and if you want to file a tax form for a partnership, that is Form 1065 (U.S. Return of Partnership Income). This is a very important document that is required while filing for tax on partnership income.
Whether you have a general partnership, limited partnership, or multi-member LLC, you must know how to file this form correctly. If you don’t know, then you face penalties and compliance issues.
In this guide, we’ll break down everything you need to know about Form 1065, including:
- What is Form 1065?
- Who needs to file it?
- Key deadlines and penalties
- Step-by-step instructions for filing
- Common mistakes to avoid
- How Eric M Hunt & Company can help streamline the process
By the end of this article, you’ll clearly understand partnership tax filing and how to manage it efficiently.
What is Form 1065?
Form 1065 is the IRS tax return form used by partnerships to report their income, deductions, gains, and losses. Unlike corporations or sole proprietorships, partnerships are “pass-through” entities, meaning the business does not pay income tax. Instead, profits and losses are passed through to individual partners, who report them on their tax returns (Schedule K-1).
Key Components of Form 1065
- Basic business details (name, EIN, address)
- Financial summary (income, deductions, credits)
- Schedule K-1 (distributes taxable income to each partner)
- Additional schedules (if applicable, such as foreign transactions or depreciation)
Who Needs to File Form 1065?
Any domestic partnership with two or more members must file Form 1065, including:
- General partnerships (GPs)
- Limited partnerships (LPs)
- Limited liability partnerships (LLPs)
- Multi-member LLCs (unless taxed as a corporation)
Exceptions:
- Single-member LLCs (file Schedule C instead)
- Partnerships that elect to be taxed as corporations (file Form 1120 instead)
Form 1065 Filing Deadlines & Penalties
Deadline:
- March 15 (or the 15th day of the 3rd month after the tax year ends)
- Extensions: File Form 7004 for a 6-month extension (new Deadline: September 15)
Late Filing Penalties:
- $220 per month, per partner (up to 12 months)
- Additional penalties for incorrect or fraudulent filings
Ensure your partnership files are on time or request an extension to avoid fines.
How to File Form 1065: Step-by-Step Guide
Step 1: Gather Required Information
Before filing, collect:
- Partnership’s Employer Identification Number (EIN)
- Financial statements (profit & loss, balance sheet)
- Details of all partners (names, addresses, SSN/EIN, ownership %)
Step 2: Complete Form 1065
The form includes several sections:
- Basic Business Info (Part I)
- Income & Deductions (Part II & III)
- Schedule K & K-1 (Allocates income to partners)
- Additional Schedules (if applicable, like Schedule L for balance sheets)
Step 3: Issue Schedule K-1 to Partners
Each partner receives a Schedule K-1, which they use to report their share of income on their tax return (Form 1040).
Step 4: Submit Form 1065 to the IRS
- E-file (recommended for faster processing)
- Mail (if filing manually)
Step 5: Keep Records for Audits
You must maintain copies of all tax documents for at least 3 years.
Common Mistakes to Avoid When Filing Form 1065
- Missing the Deadline → Leads to hefty penalties.
- Incorrect Partner Allocations → Errors in Schedule K-1 can trigger audits.
- Not Reporting All Income → Including foreign transactions or rental income.
- Failing to File State Returns → Some states require separate partnership filings.
- Math Errors & Inconsistent Data → Double-check all entries.
How Eric M Hunt & Company Can Help with Form 1065
Filing Form 1065 correctly requires expertise in partnership taxation. At Eric M Hunt & Company, our tax professionals specialize in:
✅ Accurate Form 1065 Preparation & Filing
✅ Schedule K-1 Distribution & Compliance
✅ Tax Planning & Partnership Advisory
✅ IRS Audit Support & Penalty Abatement
We ensure your partnership remains compliant while maximizing deductions and minimizing liabilities.
Need Help? Contact us today for a consultation!
Final Thoughts
In this article, we have shared all the information about Form 1065, how to fill it correctly, critical partnership responsibilities, and mistakes that can lead to costly penalties. You can read these guidelines and fill out this form by yourself.
But if you are still facing any issues, we are here to help. We provide custom tax preparation and advisory services tailored to partnerships. Let us handle the complexities while you focus on growing your business.
