Everything you need to know about Form 1065

What is Form 1065?

Form 1065 is the U.S. Return of Partnership Income — the federal return filed annually by every domestic partnership and multi-member LLC taxed as a partnership. The form reports the partnership's income, gains, losses, deductions, credits, and other tax items for the year. Because partnerships are pass-through entities, the partnership itself doesn't pay federal income tax. Instead, each partner receives a Schedule K-1 reporting their share, which they report on their personal return.

Who must file Form 1065?

Every domestic partnership engaged in a trade or business or earning income within the United States must file Form 1065, including general partnerships, limited partnerships, limited liability partnerships, and multi-member LLCs that have not elected corporate tax treatment. Foreign partnerships with US-source income or US partners may also need to file. Single-member LLCs use Schedule C (sole proprietorship) instead.

What you'll need to complete it?

Have the partnership's financial statements, partner capital accounts, depreciation schedules, prior-year return, partnership agreement, and information for each partner (name, address, EIN/SSN, ownership percentage, and capital contribution and distribution history). You'll prepare a Schedule K-1 for each partner showing their distributive share of partnership items.

When and how to file?

Form 1065 is due on the 15th day of the third month after the partnership's tax year ends — March 15 for calendar-year filers. File electronically through IRS Modernized e-File (MeF) or mail to the service center in the Form 1065 instructions. Partnerships with more than 100 partners are required to e-file. Each partner must receive their Schedule K-1 by the same due date. A six-month extension is available via Form 7004.