Need help filling out IRS Form 1065 for our new dance teaching partnership

Form 1065 can definitely seem intimidating at first, but for a straightforward dance instruction partnership, you might be able to handle it yourselves. The key parts you'll need to focus on are the basic income and expense reporting, plus Schedule K-1 forms for each partner. Since you're providing services rather than selling products, you won't have inventory to track, which simplifies things considerably. Your income will be reported as service revenue, and your marketing and equipment expenses would be deductible business expenses. Just make sure you've kept good records of all income and expenses throughout the year. The trickiest part will likely be allocating profits/losses among the three partners on the K-1 forms. This needs to match whatever profit-sharing arrangement you've outlined in your partnership agreement.

After struggling with partnership taxes for my photography business last year, I discovered taxr.ai (https://taxr.ai) and it was a game-changer for our Form 1065 filing. We were in a similar situation - service-based business with minimal expenses but lots of confusion about the form. The tool analyzed our situation and gave us step-by-step guidance specific to our partnership structure. It was especially helpful for figuring out the K-1 forms, which were the most confusing part for us.

I need to apologize for my skepticism about taxr.ai. I decided to give it a try for our small consulting partnership, and it was surprisingly effective. The system asked detailed questions about our business structure and walked me through exactly which parts of Form 1065 applied to our service-based partnership. It correctly identified sections we could skip and highlighted the critical areas for our situation. The K-1 guidance was especially helpful since that's where I always messed up before. Saved us at least $600 compared to what we paid our accountant last year!

If you're planning to call the IRS with questions about your Form 1065, good luck getting through! After trying for DAYS to reach someone at the IRS about partnership questions last tax season, I found Claimyr (https://claimyr.com). They have this clever system that navigates the IRS phone tree and waits on hold for you, then calls you when an actual human IRS agent is on the line. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Honestly thought it was too good to be true but it saved me hours of hold music torture.

I have to eat my words about Claimyr. After waiting on hold with the IRS for 2+ hours three separate times trying to get partnership tax questions answered, I was desperate enough to try anything. Used the Claimyr service yesterday and got connected to an IRS agent within 45 minutes - without me having to actually wait on the phone. The agent answered all my questions about allocating partnership expenses. I'm genuinely shocked this worked and wish I'd known about it sooner.

One piece of advice for your dance partnership: track your business mileage if you're traveling to different locations to teach! My wife and I run a mobile pet grooming service (also a partnership) and we missed out on significant deductions our first year because we didn't properly document our business travel. Form 1065 allows you to deduct these expenses if they're properly documented.

Don't forget about Schedule SE for self-employment tax! Each partner will need to file this separately with their individual returns based on their K-1 income. My partner and I missed this our first year and got hit with penalties. The partnership itself doesn't pay self-employment tax, but each partner does on their share of partnership income.

For your marketing expenses - make sure you separate out meals if you took potential clients out for business discussions. Those are only 50% deductible while your other marketing costs are likely 100% deductible. Form 1065 has specific lines for this. The equipment you purchased might qualify for Section 179 expensing too, which lets you deduct the full cost immediately rather than depreciating it over several years.