View Full Version : partnerships, how do you handle taxes

swing blade
11-01-2004, 11:40 AM
Ok I am in a partnership and have been researching how the tax situation is handled. From what i have read it appears that the partnership operates as a "pass-through" taxation business; meaning that all income/losses are taxed at the individuals level and not that of the partnership itself. Is this correct? also what percentage of your income are you paying out in taxes?

11-01-2004, 11:56 AM
That depends on how the partnership is set up, a Inc., LLC., etc.

The best advise to to hire a good Accountant/CPA, esp in a partnership, period.

swing blade
11-01-2004, 12:13 PM
well I was a sole proprietor for a few years, but for this season its a partnership formed as an llc

Gautreaux's LNG
11-01-2004, 12:51 PM
Let him do your taxes! He'll cost you some but I guarantee you'll get more back!

Good luck with the pertnership! took one a few years back cost me bunch of money to get rid of him!

11-01-2004, 12:58 PM
Hi there, I am a CPA. OK, I'm going to assume a couple of things here. First, that you have a partnership agreement and second that you and your partner are each 50% partners. Whether you are a general partnership or an LLC, you are still just a partnership for tax purposes. For tax purposes an LLC is considered a disregarded entity. LLC is a legal form of business that can be a sole proprietorship, a corporation, or a partnership for tax purposes. If it is a partnership fill a form 1065 for the partnership. Each partner will receive a form K-1 stating his/her share of partnership income which is reported on schedule E of the partner's form 1040. If you don't have one already, find a CPA.