Ask Experts Questions for FREE Help !
Ask
    lakers03mc's Avatar
    lakers03mc Posts: 6, Reputation: 1
    New Member
    		  
    #1

    Dec 24, 2010, 01:51 AM
    How do I report income from a small business I started with a partner?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Dec 27, 2010, 11:48 AM
    Partnerships are "pass-through" entities, which means both the expenses and the income that the partnership generates pass through the partnership to the individual partners via the Schedule K-1.

    The result is that, if the partnership shows a loss or a profit, that loss or profit is reported on the partner's individual income tax return.

    The partnership DOES file an income tax return using Form 1065, but that return is an information return; no income taxes are paid.

    Now, if the partnership has employees (and the partners can and in most cases SHOULD be paid employees of the partnership), then the partnership WILL pay employment taxes, plus local/county/state business taxes may also be paid by the partnership.

    A partnershp return is NOT for amateurs; get professional help from either a tax accountant, a CPA or an enrolled agent.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Determine the amount active business income eligible for the small business deduction [ 1 Answers ]

Problem You, a tax professional working at a local accounting firm, have just received a request from Terry, an assurance partner in the office, asking you to prepare a memorandum to one of his client tax files. He would like you to determine the amount of active business income eligible for the...

I hv started sub-brokership business. How to prepare business details? [ 8 Answers ]

Dear All, I hv started new sub brokership business in my locality, to get finance for my business I applied to one of the institute but they told me.. we need the your business details. To convince them how to prapare business details what all things I need to mention? Help. Rgrds, Sameer

Can my partner start a new divorce even though a petition has already been started? [ 3 Answers ]

Hello, my partner and I are getting married in October. He has been separated from his wife for over 5 years and they are going through divorce at the moment. The wife now won't sign the paper to get the Decree Nisi, we think she has found out that we are getting married and wants to drag her...

WHere to report overseas BUSINESS Income? [ 2 Answers ]

I am an Aussie living in the US on an E-3, I have been here since late 2006. I have side income ($AUS coming into my Australian bank account) from an eBay business located in Australia, and I believe I must report this for my 2007 US tax return. Where and how would I report this on the 1040? Do...

Canadian Income Tax - leasing and small business [ 6 Answers ]

I need help understanding lease write off and how it will affects my tax return. Example: I earn $50,000 per yr in my career and have a small business (sole proprietorship) that I earn $2,000 per yr. If I lease a vehicle under my business that costs me $1000 per month I understand I can write...

View more questions Search