Where to Report Schedule K-1 on a Personal Tax Return

by Sarah Brumley
A Schedule K-1 comes with instructions for filling out your 1040.

When you get a Schedule K-1 form, you won't have to wonder where to put the information it gives you. The K-1 tells you, literally line by line, exactly where each number from the K-1 goes on each part of the 1040 form. The 1040 is the Internal Revenue Service form that you use for your personal taxes. The K-1 will also tell you if you need to file any other forms with your 1040.

Pass-Through Entities

You can't say much about K-1 forms without getting technical about tax laws really fast. The important thing to know is that K-1s are financial reports sent out by pass-through entities. Those entities can be partnerships, S corporations, trusts or estates. With pass-throughs, the IRS doesn't draw a line between the entity and you -- the financial results go directly to your personal income tax form. That can be useful because sometimes you can use those financial results to pay less in taxes overall.

Get to Know Your K-1

There are two categories of Schedule K-1 forms. One category of K-1 goes from the business, estate or trust to the IRS and reports the whole entity's financial results. Another category of K-1 goes from the business, estate or trust to you and reports just your share of the financial results. That's because you may own only part of the business or receive only part of the payouts -- disbursements -- from a trust or estate.

S Corporations and Partnerships

The Schedule K-1 that goes from an S corporation to you is Form 1120S. Partnerships use Form 1065B. Both forms are statements of income, expenses, deductions and credits. The K-1 that the company sends you will tell you that interest income goes on line 8a, dividends go on line 9a and 9b, and so forth. If you have to file another form, the results will probably go on Part II of Schedule E -- Supplemental Income and Loss.

Estates and Trusts

The Schedule K-1 that goes to the beneficiaries of estates and trusts is Form 1041. An estate is what you call the assets of a deceased person before everything is distributed to the heirs. A trust is an asset or a collection of assets managed by somebody other than the beneficiary. Trusts may dole out money to the beneficiary or do something like hold on to the money until the beneficiary reaches a certain age. Estates and trusts usually have only disbursements to report, so they may not send out a K-1 form every year.

About the Author

Sarah Brumley has written extensively on business and health-industry topics since 1995. Her work has appeared in publications ranging from Funk & Wagnall's yearbooks to "Medical Economics," a magazine for physicians. She holds a master's degree in finance from New York University.

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