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February 11, 2020
Question

I own a business now with two owners how do i do taxes do they get split in half or do i just claim on my taxes?

  • February 11, 2020
  • 2 replies
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2 replies

KathrynG3
February 11, 2020

You will need to file only your portion of the business on your return. Your business is a "pass-through entity" called a Partnership when two or more partners run a business together. 

 

First, prepare the Partnership Return, Form 1065 and could use TurboTax Business.

This program will prepare the return(s) which must be filed by March 15, and each partner will receive a Form K-1 for their portion of the business.

Then, report your Form K-1 on your individual tax return.

Carl11_2
Employee
February 11, 2020

I own a business now with two owners

You have what is referred to as a Partnership or a multi-member LLC. For tax purposes the only difference between the two is the spelling, and that's it. Regardless of what businesss type it is, the partnership will complete a 1065 Partnership Return. Then the partnership will issue each owner a K-1 which each owner will require before they can even start their personal tax return.

The partnership return is due March 15th unless the partnership has established in writing, a non-standard fiscal tax year. Then it's due the 15th day of the 3rd month after the last day of that non-standard fiscal year.

The late fee for filing the partnership return late is $200 per month, per owner. So assuming you're on a standard calendar year, if the 1065 return is filed March 16th, the late filing penalty will be $600 with three owners.

I would "HIGHLY" suggest you seek professional help with this yesterday, if not sooner. This is especially important if your state taxes personal income, as if your state imposes a late filing penalty you can probably double the cost of filing late. The cost of professional help can be charged to the partnership, and will be significantly cheaper than the late fees, fines and penalties that will be assessed if you do things wrong in that first year. It will make the cost of professional help seem like a pittance in comparison.