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READ YOUR K-1 CAREFULLY
March 26, 2007
The IRS last year did a major redesign of the K-1 forms for partnerships and S corporations. These "pass through" entities don't pay taxes. They instead report their income and expenses to their owners on their K-1 forms, and the owners in turn report the K-1 information on their 1040s.
The new K-1s make some of the information harder to find. Many K-1s will have "charitable deductions" buried under "other deductions," usually as code "A" on box 12 of the S corporation K-1 or Box 13 of the partnership K-1. If your K-1 comes from a farm or a manufacturing company, also look for a code "O" deduction for the so-called "Section 199 deduction."
The K-1s should come with an attachment that tells you what the items in the different boxes are. If you don't have a copy, you can find them here (second page):
Don't lose a deduction just because it looks like some sort of footnote!
This is the fourth in a series of daily filing season tax tips we are running through April 17. Find them all here.
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The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not neccesarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to
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