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The Curious Bag
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A K-1 is not a tax return but a form attached to a tax return--known as a Schedule K-1. The K-1 may be required for tax returns involving certain types of trusts and estates, partnerships or corporations.
IRS Form 1065
This is the most commonly used Schedule K-1 in connection with tax filings for partnerships. The partnership files the Schedule K-1 and provides a copy to each partner.
IRS Form 1041
Any beneficiary of a trust or estate may receive a copy of this form that is filed by the fiduciary (trustee or executor) with the IRS to report the share of income, credits or deductions each beneficiary received from the trust or estate.
IRS Form 1120S
Corporations that choose to be taxed as an "S corporation" of the IRS code must file this Schedule K-1. The IRS must approve this choice. The corporation's shareholders are treated like partners for tax purposes; for example, the corporation's profits are treated as the shareholder's income instead of as a dividend.
Taxpayer Use of K-1
As a partner, beneficiary of a trust, or shareholder in an S corporation, you will need the Schedule K-1 to correctly prepare your tax return. The IRS will compare the information in the Schedule K-1 with your return.
Extensions to File
It is common to need an extension to file your tax returns because the Schedule K-1 has yet to be prepared.
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