Guide
Schedule K-1 explained: what it is and when you need it
If you co-own a business, you may hear about a “K-1.” This guide explains in plain English what the IRS says it is, who receives one, and what to ask a CPA.
General information only, not legal or tax advice. I am not a lawyer, a CPA or an accountant. Flipfiled does not prepare tax returns or give legal advice. This page explains what the IRS says a form is. It does not tell you how your own taxes should be reported.
The short version
- A Schedule K-1 (Form 1065) is a form a partnership gives each of its partners. It shows that partner’s share of the partnership’s income, deductions, credits and other items.
- You get one if you are a partner. That includes an owner of an LLC with two or more members that is taxed as a partnership (the IRS default).
- If you are the only owner of your LLC, there is no partnership and you do not get a K-1 from it. See what an LLC does and does not do.
- You generally keep it for your records and use it when you prepare your own tax return. You do not usually attach it to your return.
Why it exists
The IRS says a partnership files an information return (Form 1065) and is not taxed on its own income. The income, gains, losses, deductions and credits “pass through” to the partners, who report their shares on their own returns. The K-1 is how the partnership tells each partner, and the IRS, what that partner’s share is.
Sources: IRS: About Form 1065 (opens in a new tab); IRS: Limited Liability Company (opens in a new tab).
When do you need one?
| Your situation | K-1 from a partnership? |
|---|---|
| You own your LLC alone and have not elected a different tax treatment | No. There is no partnership. (Tax reporting for you is a CPA question; see business expenses for resellers.) |
| You and one or more others own an LLC together, with no special tax election | The IRS says the default is partnership treatment, so the LLC files Form 1065 and gives each member a K-1. |
| You are a partner in a general partnership, or an LLP | Yes, the partnership files Form 1065 and gives each partner a K-1. |
| You are a member of an LLC taxed as an S corporation, or you receive income from an estate or trust | Those entities use different K-1 forms. This page covers only the partnership K-1. |
If you are not sure how your business is taxed, a CPA can tell you. Do not guess from this page.
What is on it
The IRS’s Partner’s Instructions describe the K-1 as reporting your share of items such as ordinary business income, rental income, interest, dividends, capital gains and deductions. The form also has a section about your capital account. Your copy has the partnership’s information and your information, including a taxpayer ID, so keep it private.
Four ideas worth knowing
- You may owe tax on your share even if you received no cash. The IRS instructions say you may be liable for tax on your share of partnership income whether or not it was distributed to you. This is one reason owners should agree in the operating agreement about when profits are paid out.
- The number on the K-1 may not be the number you can claim. The instructions say the loss you can claim may be less than the amount shown, because limits can apply: basis, at-risk, passive activity and excess business loss limits. Tracking your own basis is your responsibility.
- Do not change your copy. If you think it is wrong, ask the partnership for a corrected K-1. The partnership also sends the corrected form to the IRS.
- Report consistently. The instructions say you generally must report partnership items the same way the partnership did; if you do not, you generally must file Form 8082. Ask a CPA how that applies.
Do I file it with my return?
The IRS partner instructions say not to file it with your tax return unless specifically required, and to keep it for your records. The partnership files its own copy with the IRS.
Official forms and instructions
- Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc. (PDF) (opens in a new tab)
- Partner’s Instructions for Schedule K-1 (Form 1065) (PDF) (opens in a new tab)
- Form 1065, U.S. Return of Partnership Income (PDF) (opens in a new tab)
- Instructions for Form 1065 (PDF) (opens in a new tab)
These are tax return forms and the instructions that go with them. Flipfiled does not prepare tax returns. A CPA or enrolled agent can prepare Form 1065 and tell you what to do with a K-1. Instructions are for the tax year of the edition, so check that you have the right year.
Questions to bring to a CPA
- How is my LLC taxed, and will it file Form 1065?
- When will the partnership give me my K-1, and what if it is late?
- How do I track my basis, and what limits might apply to my losses?
- Do I owe tax on profit I left in the business?
- Should we consider a different tax election? (See S corp vs LLC in Illinois.)
I am not a lawyer or a CPA
This page is general information, not legal or tax advice. Flipfiled does not prepare tax returns, K-1s or any other tax forms, and does not give legal advice. For advice about your situation, talk to a CPA or an attorney. Checked against the IRS 2025 Partner’s Instructions on Oct 30, 2026.
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