2022 IRS Form 1065 Walkthrough | Partnership Tax Return

In this video, we'll walk you through how to fill out the IRS Form 1065 Partnership Tax Return. What is form 1065? IRS Form 1065 along with multiple various schedules is the base form used when filing partnership taxes. This example is based on a KZbin business conducted by two partners who split the business 50/50. At a minimum, Form 1065, Schedule B-1, and Schedule K-1 are required to be filed each and every year. Depending on your specific situation, there are additional forms that may be required as well. If you have a complicated tax situation, please consider consulting with a tax professional to ensure your Form 1065 and all other associated forms are filed correctly.
Here are all of the IRS Forms you will need in this example, to include:
IRS Form 1065
IRS Form 1065 Instructions
IRS Form Schedule B-1
IRS Form Schedule K-1
www.irs.gov/fo...
#IRS #Form1065 #partnership
DISCLOSURE: We are not financial advisers. The ideas presented in this video are for entertainment purposes only. Although the information is researched and vetted beforehand, it may not be up to date at the time of viewing. Please do your due diligence and research on the topic. You (and only you) are responsible for the financial decisions that you make.

[@APennyPinchersGuide]

What does your partnership do?

[@haplesshomesteadermississi1785]

My daughter and I have a freeze dried snacks company called Magnolia Munchies! :)

[@ernestlindsey1305]

We haul Dirt,Gravel & Sand.... Cost of goods sold DOES Not include equipment !! You MIGHT be able to include internet (but usually it's listed under business expenses utilities...) IF You made your videos available on DVD... the Equipment to create the dvds would NOT be included... but the blank dvds, packaging, labels & postage WOULD BE... BUT Not the Printer... LOL

[@ernestlindsey1305]

The 2023 Instructions for Form 1065 State "Report all amounts for LLC members on the line for limited partners."

[@thomass1891]

Wtf! A tax related video that doesn’t put me to sleep and keeps me interested? Well done

[@APennyPinchersGuide]

Thank you!

[@abuZizo82]

I know this video is 2 years old but you just saved me $100+ by helping me file my own 1065 because I'm a 1st time filer. Great Job man. Subscribed to return the favor.

[@betha2396]

I know this video is already a year old, but I just found it. Thank you so much for this walkthrough. This video, plus the K1 walkthrough were so incredibly helpful to me for filling out my tax forms for the first time for my new business. New sub!

[@APennyPinchersGuide]

So glad it was helpful!

[@monicavega2090]

​@APennyPinchersGuide if I got a 1099-MISC with royalties from my udemy course and I place this under box 1 regular business income instead of royalties section?

[@haplesshomesteadermississi1785]

Wow! Like so many others, I am a first time 1065 filer and was about to have a nervous breakdown trying to read the IRS instructions on how to fill out the 1065/K-1. Talk about 12 monkeys off my back after watching this video...BRAVO!!! Thank you, Thank You, THANK YOU!!!

[@mariesmit2013]

An area that should be clarified is that the Cost of Goods section is only for businesses that manufacture products or purchase them for resale. Your other business costs would be recorded under the DEDUCTIONS section (line 9-21).

[@bnika]

Hi Marie, thank you for your comment. I want to add that COGS is not subject to Manufacturing companies only. I work in Manufacturing and the Royalties industry. COGS for an artist could be something simple as a haircut, their jewelry, their clothing and etc because this represents their brand and are direct costs vs indirect costs such as a cell phone bill. I would add that COGS are direct costs vs Indirect costs. I hope this helps.

[@ameromar9693]

I was going to comment on this, thanks for the clarification. COGS is for selling goods not buying goods that aren’t for resale as mentioned by the speaker. It needed to be corrected.

[@Duby4life]

This will be our first time filling out a 1065. Thank you for this very informative walkthrough!

[@APennyPinchersGuide]

Thank you for watching!

[@ashramdhan1582]

Appreciate your effort thanks very helpful finally found someone who knows what they doing.

[@alucardhellsing9654]

I usually don't comment under youtube videos, but I would like to thank you for this educative demonstration. It's my first time filling out taxes and I was a bit confused with all that was asked on the paper. Thank you very much.

[@MrDenroe69]

Thank you so graciously for this priceless education. This form was extremely intimidating and I was already overwhelmed before I got to the 2nd page. Bless You, INDEED!

[@MareCha166]

Thank you so, so much for this. Informative but concise. I feel so much more confident filling out a 1065.

[@maul42]

Thanks for your concise rundown of this form and the K-1. Even 3 years into the business, I still need a refresher every year, nice to have a quick guide to double check against.

[@ro-berg]

Great Video! You explained this very well. Form 1065 looks confusing, but you break it down to bits that helped me understand. Well done sir.

[@APennyPinchersGuide]

Thanks!

[@stevec1788]

This is wrong. Camera lightning equipments arent cogs. They are capital assets to be depreciated. Cogs is usually for raw material and labor costs.

[@zw.9550]

It's my first time to file Form1065. It's big help. Thanks.

[@APennyPinchersGuide]

Happy to help! I know my first time filing it I was completely confused

[@motorola1543]

Absolutely essential to our business. Thank you very much. Subscribed.

[@APennyPinchersGuide]

Thank you!

[@Veda1826]

Thank God for you sir 🙏🏼

[@amyqv2295]

Question: When you enter in the amount for line 2 in the Income section, it says to attach Form 1125-A) - is this a requirement? I noticed your video didn't go over that so I am curious. Thanks for the information and for breaking this down in a simple way to understand!

[@feminineroutine]

This was extremely helpful, thank you so much.

[@LIGHTSUN1]

Thank you for the video.. i do have 2 's...1 if we do 1099 will that report on line 9 undersalaries? 2. on the video at 3:02 when speaking about cost of goods sold, would that apply if nothing was sold? just used things like printer and computer in the business ? thank you much

[@Maireteruel]

I have the same question about employees being only 1099s, did you find out? Wheter we reported under salaries or no?

[@Maireteruel]

Great video. I do have a question on the salaries or wages portion , is it only employees reported with w2s? Or can we still add the ones with 1099 as well??? I always have that confusion. Thank you

[@asleypollas3474]

This was super helpful!!! Thank YOU!

[@user-vd7ef2bz2v]

Firstly thank you so much for this video! Super useful and explanatory! Only two questions: If we are two non-US partners with a US based LLC but conducting business outside of the US is it the same procedure or is there anything different/ additional we have to do? If we start sometime during the year operating in the US does anything change? Again thank you very much!

[@acpinjax1]

SUPER helpful, thank you!!

[@APennyPinchersGuide]

I’m happy that it helped!

[@anastasiashepherd9080]

Thank was so helpful, thank you for your time explaining that all!

[@user-gq1dl2jn4x]

Great info. Thank you. would you do a updated video for this year?

[@APennyPinchersGuide]

Sorry about the late response, but we will probably do an update on the business tax videos for next tax season

[@GeorgeSalem]

Thanks!

[@APennyPinchersGuide]

Happy to help! This is what allows us to keep putting out content like this!

[@TheGaginator]

Thank so much for this

[@yolondaattaglo9711]

Thanks for the video. It was super helpful!!

[@APennyPinchersGuide]

I'm so glad!

[@ApronFever]

i have a cleaning company and we collect sales taxes on our services do we put that on form 1065? where do we add the sales tax we collected?

[@user-ho1qs1nj5i]

Where do you deduct home office expenses (mortgage, interest, utilities)?

[@abrarahmad1475]

Need Help! Can someone guide me I have prepared 1065 and K forms ... where to file these documents... I am from Pakistan and I don't see any option in IRS where i could submit these forms.

[@celestelipford6675]

We have a LLC partnership with my husband and I as partners. Our LLC has been paying health insurance premiums. Is that just a writable expense or does it have to be identified as a guaranteed payment to partners and passed through as income to each of us?

[@anmolkeyal6517]

If possible, can make video on 1065 hedge funds

[@mcmannpoems7902]

Thank you for the first reply. Two more quick questions. I filed an LLC through inc file so would that technically be filed under Domestic Limited Liability company or would I still go with Domestic General Partnership. If it is a Domestic LLC than would the net profit/loss go under general partners (ii) or partnership (iv)? Thank you again

[@teresa6635]

It says to enter the total profit on 1040 line 3. There is no line 3 on the 1040.

[@mrcaffein]

For line 29 (now line 31 I believe) what is the benefit of electing out of the centralized partnership audit regime under section 6221(b)? I was reading online that this may be beneficial for small partnerships with only a few members.

[@krisfierro4872]

For line 1c, if your business account has a balance left over from the previous year, do you add that to your income or just report it when you enter the owner's draw (loss)?

[@liyuanwang8254]

Thanks for the video! Does the prior year passive loss (real estate rental business) need to be entered on current year 1065?

[@ryryking99]

where would partner contributions be accounted for?

[@shiner2]

Great video!!

[@APennyPinchersGuide]

Thanks!

[@Oiganbah]

I have a quick question regarding my multi-member LLC, which acts as a holding company and owns a subsidiary company with its own EIN. Since the subsidiary is wholly owned by the holding company, should the subsidiary be included on the Form 1065 for the holding company? Both companies have separate EINs, and while I'm aware that I need to file a Form 1065 for the holding company to issue Schedule K-1's to the owners, I'm unsure about the specific procedure when a subsidiary is involved. Would it be treated as a disregarded entity for tax purposes?

[@dltran3162]

Hi I have two questions: 1. If you choose cash one year, can you choose accrual the next year? We didn't make a lot in Year 1, so its immaterial on our 1st year whether we choose cash or accrual? 2. We have reveneue through our LLC in Year 1. However, each partner pays the expenses and startup costs out of their own pockets. Those expenses won't go into the 1065? It should be reported on our personal income taxes? Next year will be different since the LLC will be paying those expenses directly.

[@APennyPinchersGuide]

1. You can switch but you need permission from the IRS using Form 3115 2. You should report those startup costs so you can have them as a tax deduction. Trying to report them on your personal taxes (i.e. schedule C) can make for a messy tax situation

[@m_raft]

Thank you!!

[@renyarhoj4154]

Quick question: 50/50 split partnership LLC. Ecommerce store. No sales thus no income, overall loss for the year of 2023. Online business no physical stock so no product cost without any sales. How do we specify that we had a net loss from operational costs? Based on your video I'm considering Page 1 Line 2 (Form 1125-A) but I don't know how to or if we even should fill out Form 1125-A for operational costs.

[@APennyPinchersGuide]

You shpuld be able to place it under expenses on the K-1 you had no stock so the product would be able to count as a purchase. It might be worth consulting with a tax specialist for the first year to confirm

[@patsproehnle]

Line 21. What schedule do we attach for these deductions?

[@kingstonjackson283]

Awesome video. You made this so easy to fill out. I do have one question for you? I have a partnership that I split 50/50 with my partner. Do we need to report something on our own personal taxes if so how do we do that? Thanks for your help!

[@APennyPinchersGuide]

Yes you will still report your business income on your personal taxes. When you make a schedule K-1, that will be what you used for your income tax reporting. Additionally any deductions you might take individually (i.e. home office) that will be on your personal tax return

[@kingstonjackson283]

@@APennyPinchersGuide thank you for the information but I am still a little confused and have one more question as I am used to doing schedule C and this year did a partnership. Where would I report it on my personal taxes?

[@APennyPinchersGuide]

You should not have to use schedule C since you are now doing a partnership. Double check with the IRS’ website on that since I am not familiar with filing as a sole proprietorship

[@goldenprosperity8958]

If my cogs were $0 do I just leave it blank

[@Armysforevershop]

Thank you for the video it is very helpful. Can you help to clarify in which section I would include start up Costs? I do have costs associated with my LLC set up and some educational and coaching programs I purchased.

[@APennyPinchersGuide]

Glad it was helpful! Here's an article from TurboTax that should answer your question exactly ttlc.intuit.com/community/business-taxes/discussion/where-do-i-record-my-initial-investment-on-a-partnership-on-form-1065/00/279451

[@JonNewlyn]

Great Video, Thank you - I am a UK company and have been asked to complete this form after getting an EIN number - we are supplying digital products to a USA-based company. Do I need to complete this and it appears to be for residents only?

[@APennyPinchersGuide]

I'm sorry, but I'm not familiar enough with international tax rules to give advice comfortably. In this situation I would reach out to a CPA in the state you do business the most. (Or the company you are selling to is based out of) And get a consultation about what exactly you are required to do

[@JonNewlyn]

Thank you, I will

[@christianjohnson1175]

This video is very helpful. Thanks for doing this! Is there a way to e-file or would I have to go through one of their 3rd party providers? If so, would snail mail be the cheapest option?

[@APennyPinchersGuide]

Unfortunately the 1065 isn’t supported by the IRS Free Fillable forms, so you’re only option to E file is through a 3rd party. FreeTaxUSA is one free option, but snail mail is always a valid option

[@emmaunelleSpot]

THANK YOU.

[@APennyPinchersGuide]

You're welcome!

[@D_Sievs]

Super helpful. But do I send in the k-1 and b-1 with the 1065 and also send in a k-1 with each of our personal taxes?

[@APennyPinchersGuide]

Yes, that is correct!

[@faroutantics1847]

What software do you use as a business owner to fill these out and submit them electronically to the IRS?

[@APennyPinchersGuide]

Unfortunately, I'm only aware of individual taxes that you can e-file with the IRS on your own. So you'll have to use a third party software, like FreeTaxUSA (which is actually free) to get your business taxes e-filed

[@sarthakgupta2883]

Can we file 1065 without PTIN or EFIN or EAN ?

[@addisonhouston6649]

Awesome video! I wouldn't have have to submit a schedule B-1 if none of my LLC members own 50% or more correct?

[@APennyPinchersGuide]

Yes that is correct! Thank you for watching!

[@taxlady702]

Thanks

[@APennyPinchersGuide]

You're welcome!

[@rohitagarwalss]

thanks for detailed instructions. I am filing a final return after closing my business. In the top date section, should the "tax year beginning" be "12/31/2022" or "1/1/2023"?

[@APennyPinchersGuide]

It depends on what you set your "fiscal" year to correspond with, most people use the regular calendar year. That information should be on your business formation documents you received from the state

[@rohitagarwalss]

@@APennyPinchersGuide it says "The Company’s Fiscal Year for taxable year shall end on December 31 of each year or, if earlier, the date the Company is terminated during a year." We already filed 2022 full year 1065 where I did not have to worry about these days.

[@APennyPinchersGuide]

@@rohitagarwalss unless you intentionally made your fiscal year different from the calendar year, which you would know, then go with 1 Jan - 31 Dec

[@rohitagarwalss]

Thanks!

[@MrEddyFoss]

If my business made $0, do I need to file a 1065, or just a Sckedule K-1, or all of them?

[@APennyPinchersGuide]

Still all of them even if you made $0

[@MrEddyFoss]

@@APennyPinchersGuide Thank you!

[@glvck6006]

If I have a sole llc partnership do I still need to file a 1065 ? Am the only owner

[@APennyPinchersGuide]

So long as you have not elected to be taxed as an S Corp or a Corporation, then you would just use a schedule C and a 1065 would not be required

[@xiaofenyu2671]

how do i know what’s my business code number ?

[@kimberlypalowitch6137]

Thank you for the walk through. Question: I didn't see where to add start up money. Each partner brought in $1500 to cover costs. Also, Cost of Goods Sold, does this include all expenses incurred? For example, there were business related costs for the EIN number, and there were meal costs incurred where we had business discussions (and mileage). There were also website costs. Curious if calculating COGS is as easy as counting up all expenses incurred during the year or if we can only take the cost of the website. I guess the question is more around tangible (product = website) vs intangible (meals, mileage, business EIN, etc.). Thank you in advance.

[@APennyPinchersGuide]

Yes, you "should" be able to deduct all of your start up costs. Schedule C of IRS Form 1040 makes these types of deductions a lot easier to understand, but unfortunately that's only for sole proprietors. Look up Schedule C instructions and those will point you towards the right documents to deduct mileage and meals correctly. As a caveat, understanding which expenses are deductible and by how much takes quite a bit of digging into different IRS documents to make sure you're doing it correctly. I hope that helps get you in the right direction!

[@mariesmit2013]

Hi, the Cost of Goods section is only for businesses that manufacture products or purchase them for resale. Your other business costs would be recorded under the DEDUCTIONS section (line 9-21).

[@alreynolds7152]

Do I still need to file a 1065 form if I did no business for that year ?

[@APennyPinchersGuide]

So long as your business is “active” I would think you would be required to file a form each year even if your revenue and expenses are zero. Now I could be wrong, but that’s my initial thought

[@purseypurse4214]

Can you do a 1120-S form for S-Corps?

[@APennyPinchersGuide]

Potentially in the future!

[@trenhaynes1525]

Do you have a video for form 1125-a? Is it needed if you have something on line 2 (cost of goods sold)?

[@APennyPinchersGuide]

Unfortunately we don't, from how I read the instructions then yes you will be required to fill it out.

[@AlienFiles365]

Yea!!! Thats WHAT Im talking about, baybeee!!!! YEAAHH!!!!!!!! YEAH!!!!!!!!!!!!!!!!!!!!!

[@APennyPinchersGuide]

Love the energy!

[@LizethRiveraMusic]

Hello. I made a mistake, I filed my personal taxes but wasn’t aware had to include my business. We are LLC as Partnership. Correct me if I’m wrong, to fix this I need to amend my 1040 then file 1065 with (2) K-1 forms (since its my husband and I as partners). Is there anything else I need to do? Thanks

[@APennyPinchersGuide]

From what you’ve stated, that sounds like the correct thing to do 👍

[@suhaibz2437]

thanks for the helpful tutorial if we are both foreign founders then we don't have to file the k-1, right?

[@APennyPinchersGuide]

I’m sorry I’m not sure on that one

[@suhaibz2437]

@@APennyPinchersGuide No problem thanks, how can I submit the form after I fill it?

[@APennyPinchersGuide]

@@suhaibz2437 if you filled it out yourself, then your only option is to mail it in to whichever location the 1065 general instructions tell you

[@suhaibz2437]

@@APennyPinchersGuide thanks a lot

[@paco_rolon]

aWESOME VID :)

[@APennyPinchersGuide]

Thanks!

[@Amzad92333]

You are talking a little slow. Your speed s/b 10000 words per second.

[@ZarifaZarifa-fc3ul]

Алуу

[@ZarifaZarifa-fc3ul]

Алу

[@nayazshaikh8540]

Your rate of speech is too fast , you need to explain it clearly and with medium rate of speech.. People Not only from US or UK but from other part of world also watch your video who’s language is not English

[@adriana3489]

Talks way to fast

[@danielrose9964]

Kinda lame, every time he got to something I needed an answer to he said, "most people won't have to worry about this" and just moved on lol.

[@APennyPinchersGuide]

I’m sorry it wasn’t helpful for you, what specific questions were you looking for?

[@bradycox3264]

Thank You To my new CPA 🫡

[@abrarahmad1475]

NEED HELP! Can someone guide me I have prepared 1065 and K forms ... where to file these documents... I am from Pakistan and I don't see any option in IRS where i could submit these forms.

[@tatyanarekhson4142]

Thanks!

[@APennyPinchersGuide]

You bet!