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AB The Tax Expert

Partnership tax return preparation

Partnership tax return preparation: Form 1065 and every K-1.

Partnerships and multi-member LLCs file Form 1065 and give each partner a Schedule K-1. We prepare both from reconciled books, with the price confirmed before work begins — base price $1,200. Partnerships in California and every other state, handled online.

What’s included

What partnership tax preparation covers.

Form 1065, prepared and e-filed

The federal partnership return with its balance sheet (Schedule L), book-to-tax reconciliation (Schedule M-1) and capital account analysis (Schedule M-2) where required.

Schedule K-1 for every partner

Each partner’s share of income, deductions, credits, guaranteed payments, distributions and self-employment earnings, delivered in time for their personal returns.

Tax-basis capital accounts

The IRS requires partner capital to be reported on a tax basis. We roll each partner’s capital account forward every year so the K-1s reconcile and distributions can be checked against basis.

Allocations that follow your agreement

Profit, loss and special allocations follow the operating or partnership agreement, not a default percentage, and we ask when the agreement and the books disagree.

State partnership return

Prepared alongside the federal return for the state where the partnership is organized — California Form 565 for partnerships, Form 568 for LLCs, or the equivalent elsewhere — and quoted with it.

Extension when you need one

If the books aren’t ready by March, Form 7004 gives an automatic six-month extension, and we tell partners when to expect their K-1s.

Deadlines and penalties

Partnership tax deadlines and what a late 1065 costs.

March 15 (or the next business day)

Calendar-year Form 1065 is due on the 15th day of the third month after year end. Tax-year 2025 returns were due March 16, 2026; tax-year 2026 returns are due March 15, 2027.

Six-month extension to September 15

Form 7004 extends the filing date. Partners still need their K-1s to finish their own returns, so an extended partnership usually means extended partners.

Late-filing penalty: per partner, per month

For returns due after December 31, 2025 the penalty is $255 per partner for each month or part of a month the return is late, up to 12 months — even though a partnership itself pays no income tax. Three partners, four months late: $3,060.

Relief for small partnerships

Domestic partnerships with 10 or fewer individual or estate partners that filed their own returns on time can often have the late-filing penalty removed under Revenue Procedure 84-35. We request it when it applies.

California: Form 565 or 568 and the $800 tax

LLCs taxed as partnerships (see our LLC tax preparation guide) file Form 568 and owe the $800 annual LLC tax plus the LLC fee once gross receipts pass $250,000. Limited partnerships and LLPs file Form 565 and owe the $800 annual tax; general partnerships file 565 with no annual tax.

How it works

How we prepare your partnership return.

1. Scope and quote

We confirm the entity type, the state, the number of partners and the state of the books, then confirm the price from the $1,200 base before any work begins.

2. Books first

A 1065 needs a reconciled balance sheet and clean partner equity. If the books are behind, catch-up bookkeeping comes first and is quoted separately.

3. Documents

Year-end financials, the partnership or operating agreement, prior-year return and K-1s, partner contributions and distributions, and the items on the checklist below.

4. Prepare

Allocations, guaranteed payments, capital accounts, depreciation and state adjustments are worked through, with questions batched rather than sent one at a time.

5. Review together

You see the return and each K-1 before anything is filed, with the changes from last year explained.

6. E-file and deliver

Federal and state returns e-filed, acceptance confirmed, and K-1s delivered to each partner.

What we’ll need

Form 1065 checklist.

Year-end financial statements

Profit & loss and balance sheet for the year, reconciled to the bank and credit card statements.

Partnership or operating agreement

Ownership percentages, profit and loss allocations, guaranteed payments and any changes made during the year.

Prior-year 1065 and K-1s

Last year’s return carries forward capital accounts, depreciation and any suspended items.

Partner contributions and distributions

What each partner put in and took out during the year, including property and non-cash items.

Payroll, contractors and asset purchases

Employee W-2s and Forms 941/940 if you have staff, 1099s issued to contractors, and any fixed assets bought or sold.

State registrations

Where the partnership is organized, where partners live, and where the business has employees, property or sales.

Pricing

Partnership tax return cost.

$1,200 base price

The partnership return prepared and filed, with owner K-1s. Base pricing is published on the pricing page so you know where you stand before we begin.

What can move the price

The number of partners is the main driver, because every K-1 is its own schedule. Additional states, partners in different states, unreconciled books, special allocations or a mid-year ownership change also add work. We confirm the full scope and price before work begins.

Partner returns

Each K-1 flows to a personal return. Personal tax preparation starts at $300 and is quoted alongside the partnership return when we prepare both.

Books and taxes together

Partnerships on a monthly bookkeeping plan reach tax season with reconciled books and current capital accounts, which is what keeps a 1065 at the base price.

Related

Other entity returns and related help.

All business returns

Schedule C, partnership, S corporation and C corporation returns, prepared from clean books. Business tax preparation →

Multi-member LLC?

An LLC with two or more members files Form 1065 by default unless it elected to be taxed as a corporation. This is your page — and if you elected S corp status, see S corp tax preparation.

Behind on filing?

Unfiled 1065 years accrue the per-partner penalty every month. We rebuild the books and file the missing years together. IRS resolution →

Books not ready?

The return starts with reconciled books and clean partner equity. Catch-up bookkeeping →

Common questions

How much does it cost to prepare a Form 1065?

Our base price is $1,200 for the partnership return with partner K-1s. More partners, additional states or books that need cleanup can add to it, and we confirm the full price before starting.

Does a multi-member LLC file Form 1065?

Yes, by default. An LLC with two or more members is taxed as a partnership and files Form 1065 unless it has elected to be taxed as an S corporation or C corporation.

Do we have to file if the partnership had no income?

Generally yes. A partnership that had income, deductions or credits during the year must file, and a return with no activity is often still worth filing to keep the entity current and avoid penalty notices.

What is the penalty for filing Form 1065 late?

For returns due after December 31, 2025, $255 per partner for each month or part of a month the return is late, for up to 12 months. Small partnerships can sometimes have it removed under Revenue Procedure 84-35.

When are partnership tax returns due?

March 15 for calendar-year partnerships, or the next business day when that falls on a weekend. Form 7004 extends the filing date six months to September 15.

Do you prepare the partners’ personal returns too?

Yes. Each partner’s K-1 flows to their Form 1040, and we prepare those returns alongside the 1065 so the numbers match.

Ready to get your partnership return done?

Tell us about the partnership and its partners and we’ll confirm the scope and price.

Get Started