A Partnership consists of two or individuals who are operating a business. There are four main types of partnerships: Limited liability partnership (LLP); Limited partnership (LP); General partnership (GP); and a Limited Liability Company (LLC). If you are in a partnership and wondering how to file your taxes, Torchlight Tax can help.

How Are Partnerships Taxed?

Partnerships are not taxed themselves, but are considered pass-through entities, like sole proprietors. Each partner will be taxed as an individual on his or her income earned through the partnership. Although the partnership does not pay taxes itself, a form 1065 Partnership Tax Return must be filed annually. There are also heavy monthly penalties if a Partnership does not file a tax return on time.

Keeping track of which forms need to be filed and ensuring that income is reported accurately for both the partnership and partners can be a headache. Many small businesses are formed under partnerships and there is often so much going on that bookkeeping and accounting can fall to the backburner. This has several possible detrimental effects:

  • Without proper bookkeeping, it can be nearly impossible to accurately assess which activities are making a profit and which are losing money. This can cause the business to not make its full profit potential, or even worse, fail.
  • Top sales and production personnel can wind up doing bookkeeping, of which they are not expert, to the detriment of income and delivery. A top salesman might spend ten hours mis-doing bookkeeping that a pro would do correctly in an hour.
  • Improper books can result in missed tax deductions and overpaying your taxes. They can also impede getting financing, such as SBA Loans.
  • Lack of proper bookkeeping can result in confusion as to what share each partner gets in the profit and losses of the firm, and what his capital investment in the company is.

When doing your form 1065 Partnership Tax Returns at Torchlight Tax, you can rest assured that your taxes will be correctly filed, and your tax liability legally minimized.

For some, a Partnership may be your best option. If you are starting out and trying to decide, you are welcome to call Torchlight Tax for a free consultation as to which business entity is best for your situation.

When one is doing taxes for a Partnership, a higher degree of professionalism is expected by the IRS in the bookkeeping, accounting, and tax preparation then with a Sole Proprietor. Attempting to do these hats yourself, if you are not properly trained, may not be the best idea. One of the Torchlight Tax EAs or CPAs can assist you in tax preparation and planning for your Partnership and make sure your tax savings are maximized and your hassle is minimized.

When you do your Partnership taxes with Torchlight Tax, your Form 1065 Partnership Tax Return is reviewed by another tax expert to make sure all is correct, and no tax savings are missed.

You also benefit from the fact that Torchlight Tax is one team with a network of offices. Each team member has the purpose to save your tax dollars and make the whole tax experience as painless as possible. Different EAS and CPAs have different additional expertise’s in different tax specialties.

An EA holds the highest federal tax credential. A CPA holds the highest state tax credential. This does not mean they know everything. There are millions of words in the tax code, related regulations, court cases, and so on. No one knows it all. If one of our tax pros has a question or is looking for an additional tax saving strategy, he can simply pick up the phone and ask another CPA, EA, or Tax Attorney in the Torchlight Tax Network who may be more trained in a certain specialized field of taxes. Individual practitioners do not have this option.

Also, one could donate one’s Partnership percentage to one’s church or charity, have a buyer buy the percentage from the church/charity, make no taxable income on the sale, and wind up with a charitable donation to offset OTHER income.

There are many interesting scenarios and strategies, of which the above are a few. I do not advise doing strategies like this on your own. I have given you here only the broad strokes, but a trusted CPA/EA/Tax Attorney should be involved to make sure all bases are covered. We are glad to assist you on this.

You also benefit from the fact that Torchlight Tax is one team with a network of offices. Each team member has the purpose to save your tax dollars and make the whole tax process as pleasant and painless as possible.

Just as in sports, a team operating with a common purpose is superior to an individual or group of individuals, even if the individuals are as highly trained. Please note: few tax practitioners are as highly trained and experienced as the Torchlight Tax team. At Torchlight Tax, your tax return is completed by a licensed EA or CPA. Another advantage of Torchlight Tax is our team includes administrative support staff who wear their hats in supporting the tax pro. You do not need a highly trained CPA or EA to be filing papers or handling all the robot and sales phone calls. By having administrative support, the EA or CPA is available to handle your questions year-round, saving you money, time, hassle, and worry.

To save your tax dollars without cheating or putting yourself at risk, contact Torchlight Tax to do your Partnership Tax return and the 1040 personal tax return that must and can only be done after the partnership return is completed. Schedule an appointment today!


When it comes to tax preparation, accounting, and IRS representation in the Las Vegas Valley, Torchlight Tax is ready to save you tax dollars. Contact us today for assistance in C corporation tax returns. Free Consultations are available.

Call us at 1-877-758-7797 or 702-463-1818 or email us at info@TorchlightTax.com. We can transfer your call to a branch office near you or help you directly from our central office.

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    Why Torchlight Tax

    Many people do not know how a professional tax and accounting firm differs from a bookkeeper or tax preparer. The main difference when working with a professional tax and accounting firm, such as Torchlight Tax, is that our firm utilizes the services of CPAs, EAs, and Attorneys who are distinguished from bookkeepers and other tax preparers by stringent qualification and licensing requirements. Our entire team has a purpose to legally save your tax dollars and to make taxes as painless as possible. This means we take your calls and respond to your concerns. If you receive a threatening IRS call or Notice or are worried about some tax question, we are here for year round taking your calls and responding to your emails.

    Upgrade to Tax & Accounting Firm

    Whether you are filing personal, small business, or corporate taxes, or negotiating IRS tax debt, if you are not already using a professional Tax, Accounting and IRS Representation firm, you most likely have missed out on major tax benefits. This is because a professional tax and accounting firm utilizes licensed professionals such as Certified Public Accountants (CPAs), EAs and Attorneys, who can not only advise individuals on personal financial matters but who can also advise businesses and corporations of all sizes and types. Tax laws are complicated, and no one knows everything. Torchlight Tax is a team and any one of our tax pros can call on other EAs, CPAs and Tax Attorneys in the team who may have specialist knowledge in a specific area of tax.

    Amendments

    When doing current taxes, we often come across missed tax savings from prior years. When this happens, the Internal Revenue Service allows you to amend your taxes and lower your tax liability. Whether you or your prior tax preparer missed a W-2 or 1099, a revised 1099. large charitable donations, or made some other error, amending your tax return can help you recover the money you are rightfully owed. When we find this situation, we will advise you on potential savings and amend the previously filed tax return.</p”>

    Sometimes, there may be a situation where a tax return could be amended, but it is too late to receive any benefit. Or maybe you made an error that was missed by the IRS that would have increased your tax liability. In some cases, it is prudent to file an amended return. But if it is not necessary and will not save you any money or decrease your risk, we will tell you not to bother. It is silly to amend a return to no advantage which is too old for the IRS to audit. Some firms might file a bunch of unnecessary tax returns and charge a fee. Sometimes a taxpayer himself might increase his tax liability by filing an unnecessary amendment that increases his tax liability. We will not do this.

    Amending a tax return requires more professional acumen then doing it right in the first place. At Torchlight Tax, we do file the tax return correctly the first time. And we will happily amend your tax return, but only if it actually is to your benefit. If you think you might need to amend tax returns, contact Torchlight Tax for a free consultation.

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