Schedule K-1 tax form

What is a K-1 tax form?

Schedule K-1 is a tax form prepared annually by U.S. pass-through entities—such as business partnerships, limited liability companies (LLCs), S-corporations, trusts, and estates. Often simply called a “K-1”, this form is used to report each stakeholder’s share of the entity’s income, losses, and dividends for the tax year to the Internal Revenue Service (IRS). 

Most pass-through entities don’t directly pay income tax at the corporate or entity level, instead passing their earnings—along with the associated tax liability—on to individual partners, shareholders, or beneficiaries. 

K-1 tax forms are typically completed by the entity, filed with the Internal Revenue Service (IRS), and issued to each participant. As K-1 income is often taxable, recipients must also account for it on their personal income tax return ( Form 1040).

There are three types of Schedule K-1, each used by a specific pass-through entity:

Form 1065

Partnerships use Form 1065 to report each partner’s share of the income, losses, deductions, liabilities, capital gains, tax credits, and dividends. It is distributed to partners and certain investors, including limited partners (LPs), who include the information on their individual tax return.

A Schedule K-1 (Form 1065) template is available via the IRS.

Form 1120-S

Form 1120-S is issued to shareholders of an S-corporation (S-corp) to report their allocated share of the company's gains, losses, deductions, and credits. Unlike C-corporations, S-corps do not pay taxes on corporate income; instead, S-corp shareholders report earnings on their individual tax returns.

For more information about Form 1120-S, visit the IRS website.

Form 1041

Form 1041 is used to report distributions and deductions to beneficiaries of trusts and estates. While beneficiaries must include this distributed income on their personal tax returns, the estate or trust only pays taxes on undistributed income. 

You can download a Form 1041 template from the IRS website.

When are K-1s due?

The deadline for filing a K-1 with the IRS depends on the fiscal year used by your entity and whether it files for an extension, which is common for LLCs. 

If the entity follows the calendar year, K-1s must be filed by March 15. If the entity follows a different fiscal year schedule—for example, a fiscal year ending on January 31 to account for a busy calendar year Q4, as is the case with some retail companies—then the K-1 is due to federal tax authorities on the fifteenth day of the third month after the end of the partnership’s tax year. 

Many entities request a six-month extension of time to file the return with the IRS in order to have more time for tax planning and to gather documents. This makes the K-1 due date September 15 for entities that follow the calendar year, or the 15th day of the ninth month after the close of the fiscal year for entities that follow other schedules.   

These dates may differ from the dates by which LLCs are obligated to share K-1 information with partners; these deadlines may be included in the partnership agreement.

Who needs to file a K-1?

A K-1 form is usually prepared by the accountant who manages the entity’s taxes, before being issued to each partner, shareholder, or beneficiary. The entity must file a copy of the relevant K-1 (Form 1065, Form 1120-S, or Form 1041) with the IRS.

Individual stakeholders do not fill out K-1s, but they can use the information to prepare their personal income tax return  ( Form 1040) for that tax year.

Sometimes LLCs choose to be taxed like C-corporations. In this case, the entity pays taxes rather than passing it on to partners, so partners will not receive a K-1. If you’re not sure how your LLC is taxed, ask your LLC’s accountant whether or not you should expect a K-1.

What is in a K-1 form?

The following information is required when filling out a Schedule K-1 ( Form 1065) for a partnership, or Form 1041 for an estate or trust.

Part I: Information about the partnership [or estate or trust]

• The partnership’s EIN

• The partnership’s address

Part II: Information about the partner [or beneficiary]

• The partner’s social security number

• The partner’s address 

• The type of partner 

Part III: Each partner’s [or beneficiary’s] share of:

• Ownership

• Income

• Liabilities 

• Deductions 

• Credits 

• Dividends 

• Royalties 

• Capital gains 

• Other items

If you’re completing a U.S. Income Tax Return for an S-corporation ( Form 1120-S), you’ll need to provide information about:

• The corporation’s income, deductions, and tax payments

• The shareholders’ pro rata share items

• Balance sheets and reconciliation of income (loss)

• Analysis of adjustments and additions

What to know about getting a K-1 extension

Entities may request an extension of their filing deadline by filing Form 7004 by the regular due date of the return. Because this could affect the ability of partners to file their individual returns with the proper information, it’s important to review the partnership agreement closely for any obligations to partners regarding sharing an estimated K-1 by a certain date, regardless of whether the entity has filed for an extension of its federal return. 

For partners receiving K-1s from an LLC, they can ask the partnership’s accountant when they should expect to receive the Schedule K-1 form. If the LLC is filing for an extension, partners may need to file for a personal income tax extension as well. 

Keep in mind that a request for extension of time to file is not an extension of time to pay the tax liability.

How Carta helps LLCs with K-1s

The Carta LLC product provides a clean, real-time ownership ledger for LLCs, making it much easier for tax professionals to prepare and send K-1s. Once a K-1 has been uploaded to the platform, Carta’s system will automatically match each form with the relevant interest holder, so you can share multiple documents in just a few clicks. You can also see a record of previous K-1s and who has received them.