Go Back

Who pays taxes in a partnership?

Who pays taxes in a partnership?

In a partnership, the partnership itself does not pay taxes on its income. Instead, the income, losses, deductions, and credits of the partnership are passed through to the individual partners and reported on their personal tax returns.

Each partner is responsible for paying taxes on their share of the partnership’s income, whether it is distributed to them or not. The partnership will provide each partner with a Schedule K-1, Partner’s Share of Income, Deductions, Credits, etc., which lists the partner’s share of the partnership’s income, losses, deductions, and credits. The partner will use this information to report their share of the partnership’s income on their personal tax return.

It is important to note that partnerships are subject to different tax rules than other types of business structures, such as corporations. If you are a partner in a partnership, you should consult with a tax professional to understand your tax obligations and ensure that you are complying with all relevant tax laws.

Prominent Financial Consultants offers a range of services to help our clients succeed, and we would love the opportunity to discuss how we can help you. If you would like to schedule an appointment with us, please schedule a free 15 Minute Financial Clarity Call so that we can learn more about your needs and goals or schedule your tax appointment here.

You’re a click away from financial clarity book your call today.

During our 15 minute Financial Clarity Call, you’ll experience the clarity that comes with knowing your next step(s) when it comes to your financial goals. No matter what stage of life or business you’re in —our team will do whatever it takes to ensure you feel empowered. Best of all, it’s 100% free when you book today.

Book Financial Clarity Call