Tax
Schedule K-1
Schedule K-1 is a tax document issued by a partnership, S-Corporation or trust reporting each owner's share of income, deductions and credits. Recipients use the K-1 to complete their personal tax returns. The entity issues one K-1 per owner each year.
In plain terms: Your personal slice of a partnership's results, in a form you attach to your own return.
Why it matters
The reason partners cannot file early. K-1 income is taxable to the partner whether or not any cash was distributed, which produces the unwelcome situation of owing tax on profit that remains in the business.
Common misunderstanding
Assuming you are taxed only on what you withdrew. Allocation, not distribution, drives the tax.
Read the full guideUS business taxes