Partnerships' and LLCs' Tax Returns

If you operate your business as a partnership, the partnership must file Form 1065, U.S. Return of Partnership Income, on an annual basis, to report income and deductions. Each partner must receive a copy of Schedule K-1, Partner's Share of Income, Deductions, Credits, etc. (which is part of Form 1065), or a substitute K-1. For partnerships with a calendar year, the due date for the annual return and Schedule K-1 is April 15 (or the next business day if the "Saturday, Sunday, holiday rule" applies).

For federal tax purposes, limited liability companies with more than one member are treated as partnerships, and LLC members are treated as partners. (Unless the LLC has made an election to be taxed as a corporation.)

A partnership may apply for an automatic five-month extension to file its annual return by filing Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, by April 15. The return would then be due by September 15. The IRS will no longer send notices approving an extension. Instead, it will only send a notice if the extension request is denied.

Remember, the extension only applies to the filing of the partnership return, not to the payment of any tax that may be due. The partnership must pay any tax that is due by April 15 or it may be subject to interest and penalties on overdue taxes.

Fiscal year taxpayers. If your partnership uses a fiscal year rather than a calendar year, the annual partnership return (including all the applicable schedules), must be filed no later than the 15th day of the fourth month after the end of the partnership's tax year. A fiscal year partnership is entitled to the same automatic five-month extension to file its return to which a calendar year partnership is entitled. The extension request must be filed by the date the original return is due (the 15th day of the fourth month after the partnership's tax year). The due date for the filing of the return then is the 15th day of the fifth month after the original due date of the return.

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