Is my small partnership required to file Form 1065 electronically this year?

Does this apply even if our revenue is really low? We're just a small side business that made like $47,000 total last year between the three of us. Seems excessive to make tiny businesses pay for filing software.

Yes, the electronic filing requirement is based on entity type, not revenue amount. Even partnerships with very low revenue are subject to this requirement. The IRS doesn't provide a revenue threshold exemption. Many tax software options offer more affordable tiers for simple returns. Some even have free or low-cost options for partnerships with straightforward situations. You might want to look into options like FreeTaxUSA, TaxAct, or TaxSlayer which tend to be more budget-friendly than the premium options.

How user-friendly is it for someone who isn't super tax-savvy? I've been filing our partnership return myself for years but I'm not an accountant and get confused with certain parts. Does it guide you through the process or do you need to know exactly what you're doing?

I'm hesitant about uploading financial documents to some random website. How secure is their system? And do they keep your data or delete it after filing? I'm pretty paranoid about financial info security.

The interface is designed for people who aren't tax experts. It asks simple questions in plain English, and their document analyzer pulls most of the needed information automatically. You don't need to know all the form line numbers or technical details - it guides you through everything step by step. Their platform uses bank-level encryption for all document uploads and they have a clear data policy. They only keep your info for as long as needed to complete your filing, then you can request deletion. They're not just some random website - they're actually used by many small business owners and partnerships specifically.

How much does this service cost? Seems like it would be expensive just to get a phone call through.

This sounds like a scam. How exactly do they get you "priority access" to the IRS? The IRS doesn't let third parties skip the line. I'm suspicious that this is just taking advantage of desperate people who need tax help.

They don't charge based on a successful connection - that's what surprised me. Check their website for the current pricing structure as I don't want to quote something that might change. They don't have "priority access" - that's not how it works. They use an automated system that continually redials and navigates the IRS phone tree until they get through, then they call you. It's basically like having someone sit on hold for you, but with technology. They're just saving you from the mind-numbing experience of listening to hold music for hours. No magic backdoor access to the IRS, just a clever solution to a frustrating problem.

Would VITA help with a partnership that made around $62k last year? I thought they only helped individuals with basic returns.

It varies by location. Most VITA sites focus on individual returns with income below $60k, but some have volunteers who can handle basic partnership returns. It's worth calling your local VITA site to ask specifically. Some VITA locations have expanded their services to include simple small business returns, especially in communities with many entrepreneurs. Keep in mind that availability depends on having volunteers with the right certification level to handle business returns.

They're definitely ramping up enforcement. My brother's 2-person partnership got hit with a $260 penalty for filing by paper last November. The IRS letter specifically cited failure to file electronically as required. They appealed but got denied because they didn't qualify for any of the exceptions.

Thanks for sharing your experience Sofia! This is really helpful. Can you recommend which specific software you ended up using? I'm in a similar boat with a 3-person partnership and trying to figure out the most cost-effective option. Also, about how much did you end up paying for the software? I'm trying to budget for this since it's a new expense we weren't planning for.

I ended up using TaxAct for Business after comparing several options. It cost me around $180 for the partnership package, which includes e-filing and unlimited K-1s. What I really liked was that it imported most of our data from last year's PDF return, so I didn't have to re-enter everything manually. FreeTaxUSA Business was another option I considered - it's about $40 cheaper but the interface wasn't quite as intuitive for me. TaxSlayer Business was in the middle price-wise around $120. The key is to look for software that specifically handles Form 1065 and can generate all your K-1s automatically. Most of the major providers offer free trials or money-back guarantees, so you can test them out before committing. Just make sure whatever you choose can handle electronic filing directly to the IRS - that's the whole point of making this switch!

I totally understand your frustration - the IRS really could have communicated this change better! For document preparation, you'll typically need your prior year Form 1065 and K-1s, current year profit & loss statements, balance sheet, depreciation schedules, and any 1099s the partnership received. Most software will give you a checklist when you start. Regarding estimated taxes - that's usually handled separately. The partnership software generates the K-1s that show each partner's share of income, but individual partners are responsible for making their own estimated payments based on those K-1s. Some software packages include partner-level tax planning tools, but the actual estimated payment process is typically done through the individual partner's personal tax situation. I'd recommend starting with the free trials that @Omar Fawzi mentioned. TaxAct and FreeTaxUSA both let you input your info and see how everything flows before you pay, which really helps with planning and making sure you have all the right documents ready.