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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28082
Experience:  Taxes, Immigration, Labor Relations
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When two people open a new buiesness, at tax time are they

Customer Question

When two people open a new buiesness, at tax time are they suppose to fill a joint buiesness return?
Submitted: 7 months ago.
Category: Tax
Expert:  Lev replied 7 months ago.
Based on your information - you have a partnership.A partnership is the relationship existing between two or more persons/entities who join to carry on a trade or business. Each person/entity contributes money, property, labor or skill, and expects to share in the profits and losses of the business.The partnership files its own tax return form 1065 - - reporting income and deductions - thus you would need to have a separated tax ID for the partnership.But the partnership doesn't pay income tax.Partnership should issue schedules K-1 to each partner reporting pro-rata share of net taxable income (or loss) -http://www.irs.gov/pub/irs-pdf/f1065sk1.pdfSome additional information about partnerships may be found in IRS Publication 541 -http://www.irs.gov/publications/p541/index.htmlQuestions?
Expert:  Lev replied 7 months ago.
But the partnership doesn't pay income tax.Partnership should issue schedules K-1 to each partner reporting pro-rata share of net taxable income (or loss) -http://www.irs.gov/pub/irs-pdf/f1065sk1.pdfSome additional information about partnerships may be found in IRS Publication 541 -http://www.irs.gov/publications/p541/index.html.I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.