Partnerships
Build a shared business with support for registration, bookkeeping, and partner tax reporting.
What is a Partnership?
A partnership generally involves two or more people carrying on a business and sharing its profits and losses. Legal forms include general and limited partnerships; a multi-member LLC can also be taxed as a partnership.
Get your business set up.
Clarify ownership, responsibilities, profit sharing, and decision-making before launch. Registration and liability depend on the legal structure and state. We can help coordinate the accounting and registration work; an attorney can help with partnership agreements.
Every Clean Accounting plan includes one business registration and an IRS EIN application. Included services depend on your plan and business needs; government filing fees are paid by the client.
How taxes and documents work.
Federal income tax
A partnership generally files Form 1065, an information return. Income and other tax items usually pass through to partners, who report their shares on their own returns. Taxable allocations can differ from cash distributions.
Documents issued to partners
The partnership provides Schedule K-1 (Form 1065) to each partner, showing their allocated income, deductions, credits, and other items. Partners generally are not employees and should not receive W-2s for their work as partners.
Other business documents
W-2s may be required for nonpartner employees, and 1099-NECs may be required for reportable contractor payments. Partner self-employment tax treatment depends on their role and the applicable rules.
These are common U.S. federal treatments. State taxes, elections, and your business activities can change the requirements. Records, financial statements, and tax forms each serve a different purpose.