Glossary
Schedule K-1
The statement a partnership or S-corporation gives each owner showing their share of income, deductions and credits for their own return.
The K-1 is why partnership and S-corp returns are due in March: each owner needs it to file in April. It reports the owner's share of ordinary income, separately stated items (capital gains, interest, charitable contributions), distributions, and the owner's capital account. The owner pays tax on the share whether or not it was distributed.
Late or corrected K-1s are the most common reason owners file extensions. Owners who receive a K-1 after filing have to amend. Partnerships that get the capital accounts wrong carry the error into every future year.
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