What Is IRS Form 1065? A Simple Guide for Business Owners

If you run a business with partners, there’s a good chance you’ll need to deal with IRS Form 1065. This form plays a key role in how partnerships report their activity to the IRS, even though the partnership itself typically doesn’t pay taxes.

Many business owners find tax forms confusing, especially when multiple people are involved. But understanding Form 1065 is important to stay compliant and avoid costly and unnecessary penalties.

In the sections below, you’ll learn what Form 1065 does, who must file it, and how it fits into your annual tax filing process.

Who Needs to File Form 1065?

Partnerships come in many forms, but most are required to file IRS Form 1065 each year. Even though each business structure may differ in how it operates or protects its owners, the IRS generally treats these entities similarly for reporting partnership income.

Here are the most common entities that must file Form 1065:

✅ General partnerships

This structure involves two or more people who manage the business and share in its profits and losses. Each partner typically bears personal responsibility for the business’s debts and obligations.

✅ Limited partnerships (LPs)

LPs consist of both general partners (who manage the business and assume personal liability) and limited partners (who contribute capital but do not participate in daily operations). Limited partners are generally liable only up to the amount they invest.

✅ Limited liability partnerships (LLPs)

LLPs are often used by professional service businesses. They operate like general partnerships but typically protect each partner from being held personally liable for certain actions of the other partners.

✅ Limited liability companies (LLCs) taxed as partnerships

LLCs with more than one member that elect to be taxed as partnerships must file Form 1065. These entities offer limited liability protection and flexible management, making them a common choice for small business owners.

✅ Foreign partnerships with U.S. income

A foreign partnership must file Form 1065 if it earns at least $20,000 in U.S. income or if 1% or more of its total income is effectively connected with a U.S. trade or business. This requirement applies even if the business is based outside the United States and all of its members are foreign persons.

✅ Certain joint ventures

Some joint ventures may be treated as partnerships for federal tax purposes. In these cases, Form 1065 is required to report shared income and expenses.

Does Each Partner Need to File Form 1065?

No. Form 1065 is filed once per partnership, not by each individual partner. After the form is submitted, each partner receives a Schedule K‑1, which outlines their share of the business’s income, deductions, and tax credits. Partners then use this information to complete their personal tax returns.

What Happens If You Don’t File?

Missing the Form 1065 deadline can lead to costly consequences. Even if a partnership doesn’t owe taxes directly, the IRS may still impose penalties for late filings or missing information. These penalties are typically calculated per partner, so the total cost can add up quickly.

Late Filing Penalty

If a partnership does not file Form 1065 by the deadline and fails to request an extension, the IRS may impose a penalty under IRC Section 6698. For tax years with returns due after December 31, 2024, the penalty is $245 per partner for each month (or part of a month) the return is late, up to a maximum of 12 months.

Failure to Furnish Schedule K1

Each partner must receive a Schedule K-1, which reports their individual share of the partnership’s income, deductions, and credits. Failing to provide this form on time can result in a separate penalty. For 2025 filings, the penalty is $330 per missing or late K‑1. If the IRS finds the delay was due to intentional disregard, the penalty may increase to $660 per partner, subject to annual limits adjusted for inflation.

Interest Charges

Even if a partnership files for an extension, interest may still apply to any taxes not paid by the original due date. Interest continues to accrue until the tax is paid in full.

How to File Form 1065

Before completing Form 1065, it’s important to gather accurate records for the partnership’s tax year. This typically includes income and expense reports, a copy of the partnership agreement, and any documents showing assets, liabilities, or capital contributions.

The form itself includes several parts, each serving a specific purpose in reporting the partnership’s financial details.

Page 1: Basic Information and Income Statement

The first page asks for general information about the partnership, including its name, address, and Employer Identification Number (EIN). It also includes the core income statement, where the partnership reports total income, deductions, and the resulting profit or loss.

Schedule K and Schedule K-1

Schedule K summarizes the partnership’s total income, deductions, and tax-related items for the year.

Schedule K‑1 breaks down this information for each individual partner. Every partner receives a K‑1 showing their share of the business’s earnings, losses, and credits. This form is required for each partner to file their personal tax return.

Schedule B

This schedule contains questions that determine whether the partnership qualifies for simplified filing. If the answers to all four questions in Part 6 of Schedule B are not “Yes,” and the partnership doesn’t qualify for the small-entity exception, it must complete additional forms.

Schedule L, Schedule M‑1, and Schedule M‑2

These schedules provide a more detailed look at the partnership’s financial position:

Schedule M‑3

Partnerships with total assets of $10 million or more may be required to file Schedule M‑3, which provides more detailed reconciliation and reporting. This schedule may also apply in other situations based on IRS rules.

When Is Form 1065 Due?

IRS Form 1065 is generally due on the 15th day of the third month after the end of the partnership’s tax year. For partnerships that follow the calendar year, the standard deadline is March 15.

If March 15 falls on a weekend or federal holiday, the due date shifts to the next business day.

Filing Extension

If a partnership needs more time, it can request a six-month filing extension by submitting IRS Form 7004 before the original deadline. This typically moves the filing due date to September 15.

📝 Important: This extension only applies to the filing of Form 1065, not to any taxes that may be due. To avoid penalties and interest, the partnership should estimate and pay any tax owed by the original March deadline.

📌 Also read: Tax Extensions: How to File, Important Rules & Deadlines

How to Submit Form 1065 to the IRS

Before submitting the form, make sure all figures are accurate and the return is signed by an authorized partner. If a tax preparer fills out the return, they must also sign and include their Preparer Tax Identification Number (PTIN).

You can file in two ways:

✅ Electronic filing (IRS e-file) – This is the IRS’s preferred method. The return is considered on time if it is successfully transmitted by the due date, based on the partnership’s local time zone.

✅ Mailing a paper return – The return must be postmarked by the deadline. It should be properly addressed, include sufficient postage, and be mailed through an approved delivery method.

Where to Mail Form 1065

The correct IRS mailing address depends on two factors:

If the partnership’s principal business, office, or agency is located in:	And the total assets at the end of the tax year are:	Use the following Internal Revenue Service Center address:
Connecticut, Delaware, District of Columbia, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, Wisconsin	Less than $10 million and Schedule M-3 is not filed	Department of the Treasury Internal Revenue Service Kansas City, MO 64999-0011
Connecticut, Delaware, District of Columbia, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, Wisconsin	$10 million or more or less than $10 million and Schedule M-3 is filed	Department of the Treasury Internal Revenue Service Ogden, UT  84201-0011
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming	Any amount	Department of the Treasury Internal Revenue Service Ogden, UT 84201-0011
A foreign country or U.S. possession	Any amount	Internal Revenue Service P.O. Box 409101 Ogden, UT 84409

📌 Also read: When Are Taxes Due? Important Deadlines

Final Thoughts

Filing Form 1065 plays an important role in how partnerships report their financial activity to the IRS. Although the form itself doesn’t generate a tax bill, it helps ensure that each partner accurately reports their share of the income, deductions, and other items.

To stay compliant, partnerships typically need to keep organized financial records, file on time, and include all required schedules. If your partnership is approaching its first filing season or your business activities have changed, it may help to review the current IRS instructions or speak with a qualified tax professional.

📌 For more insights on business taxes and reporting requirements, explore our other articles.

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