# IRS Form 1065: Partnership Income Guide and Filing Requirements

![Form 1065: An IRS tax document used to declare the profits, losses, deductions, and credits of a partnership.](https://www.investopedia.com/thmb/IhS8i3_haCUCL05tl9wrjQETG_8=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/form-1065.asp-1-FINAL-1-1-a8eca9abf18e4dac8e959fd45be5aff4.png)

*— Investopedia / Joules Garcia*

## What Is Form 1065: U.S. Return of Partnership Income?

Form 1065, the U.S. Return of Partnership Income, is a crucial IRS tax document for partnerships to report financial activities such as profits, losses, deductions, and credits. Partnerships themselves don’t pay income taxes; instead, profits or losses pass to individual partners to handle on their personal tax returns.

Partnerships must also submit a [Schedule K-1](https://www.investopedia.com/terms/s/schedule-k-1.asp) for each partner alongside Form 1065. This form gives the IRS a comprehensive overview of the partnership's annual financial standings.

### Key Takeaways

*   Form 1065 is an IRS document used to report the financial activity of partnerships, including profits and losses.  
    
*   Partnerships must file Form 1065 annually along with a Schedule K-1 for each partner, detailing their share of the partnership’s income.  
    
*   The deadline for filing Form 1065 is the 15th day of the third month after the end of the tax year, typically March 15 for calendar-year partnerships.  
    
*   Foreign partnerships with U.S. income and nonprofit religious organizations classified as 501(d) may also be required to file Form 1065.  
    
*   Penalties for not filing Form 1065 on time can result in significant charges for each month of delay per partner.

## Eligibility Criteria for Filing Form 1065

All partnerships must file Form 1065: U.S. Return of Partnership Income. This includes a general partnership, a limited partnership, or a limited liability corporation (LLC) classified as a domestic partnership and headquartered in the U.S. The IRS defines a partnership as two or more people carrying a trade or business together.

Partnerships and LLCs are [pass-through entities](https://www.investopedia.com/terms/f/flow-through.asp), where any profits or losses pass directly to the partners or LLC members. Individual partners report and pay taxes on their share of the business income on their personal tax returns using Schedule K-1 and then file this form with their personal tax returns, [IRS Form 1040](https://www.investopedia.com/terms/1/1040.asp). The partnership or LLC then files a single IRS Form 1065, but the business does not pay the income tax.

Foreign partnerships with income in the U.S. must also file Form 1065. However, foreign partnerships earning less than $20,000 in the country or partnerships that receive less than 1% of their income in the U.S. may not have to file.

Nonprofit religious organizations classified as [501(d)](https://www.investopedia.com/terms/1/501c.asp) also file this form. They must show that profits were given to their members as dividends, regardless of whether they were distributed.

> **Important**
>
> Partnerships may have to file additional schedules with Form 1065. They include Schedules L, M-1, and M-2.

## Filing Process for Form 1065

A domestic partnership commonly files Form 1065: U.S. Return of Partnership Income by the 15th day of the third month following the date its tax year ended, usually by March 15th of each year. Businesses commonly submit through online tax filing services or by mail.

Form 1065 requires partnerships to gather important year-end financial statements, including a profit and loss statement that shows net income and revenues, deductible expenses, and a balance sheet for the beginning and end of the year.

The form must include the Employer Identification Number (EIN), or Tax ID, the number of partners in the business, and start dates for the inception of the business. Form 1065 also requires information about the partners and their stake in the company by the percentage of ownership.

Before completing Form 1065, filers will find the information required from the following:

*   [Form 4562: Depreciation and Amortization](https://www.investopedia.com/terms/f/form-4562.asp)
*   Form 1125-A: Cost of Goods Sold
*   [Form 4797: Sales of Business Property](https://www.investopedia.com/terms/f/form-4797.asp)
*   Copies of any [Form 1099](https://www.investopedia.com/articles/personal-finance/082514/purpose-1099-forms.asp) issued by the partnership
*   Form 8918: Material Advisor Disclosure Statement
*   Form 114: Report of Foreign Bank and Financial Accounts
*   Form 3520: Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts

Farming partnerships need a copy of [Form 1040](https://www.investopedia.com/terms/1/1040.asp) individual tax return as well.

[Form 1065](https://www.irs.gov/pub/irs-pdf/f1065.pdf)

![Form 1065](https://www.investopedia.com/thmb/1zW4uyGUr94-HmVnOs5KtPeBqCk=/1102x0/filters:no_upscale():max_bytes(150000):strip_icc()/Screenshot2024-07-15at11.58.57AM-52c4cfdf90be467dabfb69c634f80121.png)

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## Deadlines for Submitting Form 1065

Form 1065 must be filed by the 15th of the third month after the end of a company's tax year. So if the partnership follows the calendar year, it must file Form 1065 by March 15. If the business needs an extension, it must file Form 7004 by the appropriate deadline for its tax year.

When filed by the deadline, the company automatically receives a six-month extension. The IRS won't contact the business with approval, but it will if the extension is denied. Each partner must file Form 7004 unless the company has a common parent or agent, in which case a blanket request can be submitted.

## What Is the Penalty for Failing to File Form 1065?

A late filing penalty is assessed against the partnership if the partnership fails to file Form 1065: U.S. Return of Partnership Income, by the due date, including the extension if requested. The penalty for returns due in 2025 is $245 for each month not filed per applicable partner.

## Do I Need to File a 1065 If My Partnership Did Not Have Income?

Every domestic partnership must file Form 1065 unless it does not receive income or does not incur any expenditures treated as deductions or credits for federal income tax purposes.

## What Is the Difference Between a K-1 and Form 1065?

A [K-1 document](https://www.investopedia.com/ask/answers/09/k-1-tax-form.asp) is prepared for each partner, shareholder, or beneficiary. A partnership then files Form 1065, the partnership tax return that contains the activity found on each partner's K-1.

## The Bottom Line

Form 1065 is an essential IRS tax document for partnerships to report profits, losses, deductions, and credits. It is required for all partnerships, including domestic partnerships, foreign partnerships with U.S. income, and certain nonprofit organizations. Each partner must receive a Schedule K-1, detailing their share of the business's financial activity.

Partnerships must file Form 1065 by the 15th day of the third month after the end of their tax year; for most, that means a March 15 deadline. Failure to file on time can incur penalties, so partnerships should ensure timely and accurate completion of all required documents.  

> **Article Sources**
>
> 1.  Internal Revenue Service. "[Instructions for Form 1065, U.S. Return of Partnership Income](https://www.irs.gov/pub/irs-pdf/i1065.pdf)," Pages 3-4.
>     
> 2.  Internal Revenue Service. "[LLC Filing as a Corporation or Partnership](https://www.irs.gov/businesses/small-businesses-self-employed/llc-filing-as-a-corporation-or-partnership)."
>     
> 3.  Internal Revenue Service. "[Tax Information For Partnerships](https://www.irs.gov/businesses/partnerships)."
>     
> 4.  Internal Revenue Service. "[Instructions for Form 1065, U.S. Return of Partnership Income](https://www.irs.gov/pub/irs-pdf/i1065.pdf)," Page 5.
>     
> 5.  Internal Revenue Service. "[Instructions for Form 1065, U.S. Return of Partnership Income](https://www.irs.gov/pub/irs-pdf/i1065.pdf)," Page 19.
>     
> 6.  Internal Revenue Service. "[Instructions for Form 1065, U.S. Return of Partnership Income](https://www.irs.gov/pub/irs-pdf/i1065.pdf)," Page 6.
>     
> 7.  Internal Revenue Service. "[Form 1065, U.S. Return of Partnership Income](https://www.irs.gov/pub/irs-pdf/f1065.pdf)," Page 2.
>     
> 8.  Internal Revenue Service. "[Instructions for Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns](https://www.irs.gov/pub/irs-pdf/i7004.pdf)," Pages 1-2.
>     
> 9.  Internal Revenue Service. "2024 Instructions for Form 1065, U.S. Return of Partnership Income," Page 7.
>     
> 10.  Internal Revenue Service. "[Instructions for Form 1065, U.S. Return of Partnership Income](https://www.irs.gov/pub/irs-pdf/i1065.pdf)," Pages 4-5.
>      
> 11.  Internal Revenue Service. "[Partner’s Instructions for Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc.](https://www.irs.gov/pub/irs-pdf/i1065sk1.pdf)," Page 1.