Schedule K-1 Federal Tax Form

The Schedule K-1 is a tax form used to report income, deductions, and Credits from partnerships, S Corporations, estates, and Trusts. It provides detailed information to individual partners or Shareholder/">Shareholders about their Share of the entity’s income, losses, and other tax-related items. This form is essential for taxpayers to accurately report their income on their personal tax Returns.

For example, a partner in a partnership receives a K-1 that shows their Share of the partnership’s income, which they must then report on their Form 1040. If the partnership earned $100,000 and the partner’s Share is 20%, they would report $20,000 on their personal tax return.

In a case where a Trust distributes income to beneficiaries, each Beneficiary receives a K-1 detailing the income they must report. For instance, if a Trust generates $50,000 in income and distributes $10,000 to a Beneficiary, that Beneficiary would report the $10,000 on their individual tax return.