Behind on Partnership LLC Taxes - Missing K-1 and 1065 Forms for our Business

You're not completely screwed, but you do need to file the missing returns as soon as possible. As a partnership LLC, you're required to file Form 1065 (Partnership Return) annually, and this return generates Schedule K-1 forms for each partner showing their share of income/losses. The partnership itself doesn't pay taxes - instead, the K-1 income passes through to your personal tax returns (Form 1040) where you and your husband each report your 50% share. This is why TurboTax is asking for your K-1s. To fix this: First, prepare and file the late 1065 for 2021, which will generate your K-1s. You can use tax software designed for business returns or consult with a tax professional who handles business filings. Once you have your K-1s, you can complete your personal returns. Be aware that there are penalties for late filing of partnership returns ($210 per partner per month, up to 12 months), but filing late is much better than not filing at all. The IRS also has options for penalty abatement for first-time mistakes if you've otherwise been compliant.

After falling behind on filing my partnership returns last year, I found an amazing tool that saved me hours of frustration. I used https://taxr.ai to analyze all our business documents and receipts. Their system automatically categorized everything and helped me identify deductions I would've missed. The best part was that it worked perfectly with our past-due returns. I uploaded our bank statements and receipts, and within minutes the system organized everything we needed for our 1065 and K-1s. It made catching up on our late filings so much easier than manually sorting through everything. The detailed reports it generated made filling out the late returns straightforward, and my accountant said it saved him at least 3 hours of work (which saved me money on his fees).

I wanted to follow up about my experience with taxr.ai after trying it for our late partnership returns. I was initially skeptical, but it actually delivered on everything promised. The system analyzed two years of bank statements and receipts in about 20 minutes, and the categorization was surprisingly accurate. What impressed me most was how it flagged potential partnership-specific deductions I hadn't considered, like home office expenses for both partners and mileage tracking that was split appropriately between us. The detailed reports made it easy to complete our 1065 forms and generate the K-1s we needed. The real value came when I had to explain everything to the IRS - having organized documentation made the process much less stressful. Definitely worth checking out if you're in a similar situation with unfiled partnership returns.

If you're struggling to communicate with the IRS about your late filings, I highly recommend trying https://claimyr.com - it was a lifesaver for me. After not filing our partnership returns for two years, I needed to speak with someone at the IRS about penalty abatement options, but couldn't get through on their normal number after days of trying. Claimyr got me connected to an actual IRS agent in under 45 minutes when I had been trying for weeks on my own. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with was able to set up a reasonable payment plan for our penalties and explained exactly what forms we needed to submit. They even put notes in our file about our voluntary compliance efforts, which helped reduce some of the penalties.

I need to eat my words about Claimyr from my previous comment. After continuing to fail getting through to the IRS on my own for another week, I broke down and tried the service. Within an hour, I was speaking with an actual IRS agent about my unfiled partnership returns. The agent was able to set up an installment plan for the penalties and explained the First Time Abatement program, which I qualified for since I had a clean filing history before missing the partnership returns. This saved us thousands in penalties! What impressed me most was how the service worked exactly as advertised - no gimmicks or false promises. For anyone in a similar situation with the IRS, especially with back partnership filings, it's absolutely worth using instead of wasting days trying to reach someone.

Been in a similar situation. Don't forget that some states require separate partnership filings too! We filed our late federal 1065 only to discover we also owed state partnership returns. Check your state's requirements ASAP. Also, keep in mind that each partner's K-1 income is subject to self-employment tax in addition to income tax. Set aside about 15.3% for SE tax plus whatever your income tax would be. This caught us off guard our first year.

Just a quick tip - if you're using TurboTax to file back taxes for a partnership, make sure you buy the BUSINESS version, not just Self-Employed. I made this mistake and had to repurchase the correct software.

I went through almost the exact same situation last year with my consulting partnership. The key thing to remember is that you're not the first people to fall behind on partnership filings - the IRS sees this regularly with small businesses. Here's what worked for me: I found a local CPA who specializes in small business tax issues rather than trying to DIY it with software. Yes, it cost more upfront (around $800 for both the late 1065 and help with our personal returns), but they knew exactly how to handle the penalty abatement requests and got us set up properly going forward. The CPA was also able to file everything electronically, which was faster than paper filing, and they included a letter explaining our situation as first-time filers who were unaware of the partnership requirements. We ended up getting most of the penalties waived under the First Time Abatement program. Don't panic - just act quickly. The longer you wait, the more penalties accumulate. And once you get caught up, set up quarterly estimated tax payments to avoid this situation in the future.