Partnership Accounting - Schedule K-1

Schedule K-1

Purpose of Schedule K-1

The partnership uses Schedule K-1 to report a partner's share of the partnership’s income, deductions, credits, etc. The partner must only keep Schedule K-1 for his records, but not file it with his tax return. The partnership must file a copy of Schedule K-1 for each partner with the IRS.

Although the partnership generally is not subject to income tax, every partner is liable for tax on his share of the partnership income, whether or not distributed.