CPA for partnership and multi-member LLC tax returns (Form 1065)

General partnerships, limited partnerships, LLPs and LLCs with two or more members that have not elected corporate treatment file Form 1065. The partnership generally does not pay federal income tax. Each partner receives a Schedule K-1 showing their share of income, deductions and credits for their own return.

• Original due date: the 15th day of the 3rd month after year end, which is March 15, 2027 for calendar-year 2026.
• Extension: Form 7004, filed by the original due date, gives an automatic 6-month extension.
• Late filing penalty: charged per partner, per month or part of a month, up to 12 months: $255 for returns due in 2026 and $260 for returns due in 2027. The penalty also applies to a return that does not show all required information.

Partners are not W-2 employees of their partnership. A partner who is paid for services or for the use of capital, in an amount set without regard to partnership income, receives a guaranteed payment. The partnership deducts it as it would a payment to someone who is not a partner, and the partner reports it from the K-1.

Guaranteed payments to general and limited partners for services are net earnings from self-employment. We review how your partnership agreement (drafted by your attorney) treats these payments, then set up the K-1 coding and each partner’s estimated payments so they line up.

Partnership returns for tax years beginning in 2018 and later fall under the centralized partnership audit regime created by the Bipartisan Budget Act of 2015. Adjustments are generally made and assessed at the partnership level.

Unless the partnership elects out, it must name a partnership representative on each year’s Form 1065. The representative has sole authority to act for the partnership in an examination, and the partnership and its partners are bound by those actions. Choose someone who is reachable and who understands that role; Form 8979 is used to revoke a designation or resign.

A partnership with 100 or fewer eligible partners can elect out on a timely filed return. Eligible partners are individuals, C corporations, S corporations, certain foreign entities and estates of deceased partners, so a partnership with a partnership or trust as a partner cannot elect out.

• District of Columbia: DC taxes many partnerships and LLCs directly through the unincorporated business franchise tax on Form D-30. See DC business franchise taxes.
• Virginia: partnerships file Form 502, due April 15 for calendar-year filers, and can elect the Virginia pass-through entity tax.
• Maryland: partnerships file Form 510, or Form 511 when electing the Maryland pass-through entity tax.

Whether a PTET election helps depends on each partner’s home state and federal deduction position. We model it before payments are due.

We review the partnership agreement, capital accounts and the books, prepare Form 1065, the K-1s and the state returns together, and walk the partners through the results. Our fees are transparent and fair, quoted upfront, in writing.