Home/Services/Tax Services/Partnership & LLC Returns (Form 1065)
Split The Profit The Way You Agreed To.
We prepare Form 1065 for partnerships and multi-member LLCs, check every allocation against your operating agreement and get a K-1 to each partner in time for their own return.
Partnership Tax Return (Form 1065) Preparation In Michigan
A partnership return is really a set of promises being kept. Your operating agreement says how profit, losses and cash are split, and the 1065 is where that agreement meets the numbers. When the two do not match, a partner pays tax on income they never received, or the capital accounts drift until nobody can say who owns what.
We prepare Form 1065 for partnerships and multi-member LLCs across Michigan as part of our tax services. A multi-member LLC is taxed as a partnership by default, so if your LLC has two or more owners and has not elected otherwise, this is your return.
- Form 1065 prepared and e-filed by the March 15 calendar-year deadline, or properly extended with Form 7004
- Allocations reviewed against your operating agreement
- A Schedule K-1 for every partner or member
- Capital accounts kept on the tax basis the K-1 requires
- Guaranteed payments to working partners reported correctly
March 15 Comes Earlier Than Most Partners Expect
A calendar-year partnership files Form 1065 by March 15, a month before the partners' own returns are due. Form 7004 extends it six months, to September 15. Filing late without an extension brings an IRS penalty for every partner, for every month the return is late, so even a small partnership feels a missed deadline quickly.
Everything We Check Before A 1065 Goes Out
The return is the finished product. These are the pieces that make it right.
- Books closed and reconciled for the year before preparation begins
- Profit splits and special allocations checked against the operating agreement
- Guaranteed payments separated from each partner's distributive share
- Partner capital accounts rolled forward on a tax basis
- Contributions, distributions and ownership changes during the year recorded
- Depreciation and fixed assets reviewed, with elections made on purpose
- A Schedule K-1 for each partner, with the detail their own return needs
- The Michigan detail each partner needs to report their share
When Partners Pay Themselves, It Shows Up On The Return
Partners are not employees of their own partnership, so a working partner does not get a W-2. Money paid for their work is usually a guaranteed payment, and it is treated differently from a share of the profit. Getting the label right changes who is taxed on what, and for many working partners it changes self-employment tax as well.
We sort this out during the year when we keep the books, so partners know what to set aside for quarterly estimated tax payments instead of finding out in April. Each partner's personal return can be prepared alongside the 1065, so the K-1 and the 1040 agree.
Partnership Return Questions From LLC Owners
My LLC has two owners. Do we really need a partnership return?
In most cases, yes. A multi-member LLC is treated as a partnership for federal tax purposes unless it elects to be taxed as a corporation. That means a Form 1065 each year and a K-1 for each member, even in a year the business lost money or distributed nothing.
What if our operating agreement and the way we split money do not match?
We raise it before the return is filed. Sometimes the agreement needs updating with your attorney, sometimes the books need correcting, and sometimes the split in practice should follow the agreement. Either way, the K-1s should reflect what the partners actually agreed to, so every partner's return rests on the same numbers.
A partner joined or left this year. What changes?
Quite a bit. Income and losses have to be split between the periods before and after the change, capital accounts need adjusting and a departing partner still needs a final K-1. Tell us early, ideally the month it happens, and we will record it properly in the books rather than untangle it at year end.
Should our LLC think about an S-Corp election instead?
Sometimes. Once profits are steady, an S election can change how the owners' pay is taxed, but it also brings payroll, reasonable compensation and stricter rules about how profit is split. We run the numbers with you before you decide, and our S-Corporation formation service handles the election itself.
Other Returns Partners Often Need
Each partner's personal return prepared alongside the 1065, so the K-1 lands exactly where it should.
Personal returns in detail S-Corp Returns (Form 1120-S)For LLCs and corporations that have elected S status, with shareholder basis and reasonable compensation handled.
S-Corp returns in detail Tax Planning & StrategyDistributions, guaranteed payments and year-end timing worked through with the partners before the year closes.
Tax planning and strategy in detail Tax Services OverviewEvery return we prepare, from Schedule C to Form 1120, plus planning, estimates, amended returns and sales tax.
Return to Tax ServicesGet Every Partner On The Same Page Before March
Tell us how the partnership is set up and how last year's return went. A free first consultation is enough to spot what needs settling between the partners before March 15.