Partnerships Tax Filing
A Partnership is a legal structure in which two or more individuals operate a company together and share profits. Partnerships are not subject to income tax, rather they are pass-through entities. While the partnership itself is not taxed on its income, each of the partners will be taxed on their share of income from the partnership.
The Qualified Business Income (QBI) Deduction
The Tax Cuts and Jobs Act created a potentially valuable deduction for small business owners, self-employed individuals, and real estate investors. It’s known as the Qualified Business Income (QBI) deduction, or more commonly as the pass-through tax deduction. Qualified individuals get as much as a 20% deduction from their income from pass-through entities like LLCs and partnerships. There are income limitations and complex ways of determining the deductible amount for taxpayers who exceed them, but that’s the basic idea.
Partnership Tax Return Due Dates
The due date for income taxes for partnerships and multiple-member LLC’s taxed as partnerships is March 15. If March 15 falls on a weekend or holiday, the return is due the next business day.
To file an application to extend your partnership tax return, you must use Form 7004. This form must be filed by March 15, and taxes (estimated) must be paid by that date. You have six months to file the return, which is due September 15.
How We Can Help
We help our Partnership clients with the entire process. This starts with the determination of the optimal tax structure for the client and best State in which the Partnership should be formed. We then proceed with the creation of the LLC, tax elections as necessary, request for an EIN and finally we file the annual tax returns.