249 W. Jackson Street #260 Hayward, CA 94544

Accounting and Tax Return Preparation Services for Partnerships

The Code Accounting team has experience providing a range of tax and accounting services specifically tailored to address the needs of partnerships, including investment funds, qualified opportunity zone funds, family partnerships, and large partnerships with foreign investors. Filing partnership tax returns presents unique challenges for an accounting firm because the financial reports of the partnership need to match the tax reporting exactly and still allow for partners to be reasonably compensated in compliance with all government regulations. Partnerships must contend with a complex set of ever-changing accounting standards, financial reporting obligations, and tax rules that apply to foreign and domestic partners, related parties, and passive investors. Fortunately, the team at Code Accounting has a strong understanding of the tax and accounting issues specific to partnerships and would be happy to guide your partnership on the journey of growth.

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Partnership Tax Return Filing

We’ve filed many tax returns for partnerships over the years. One of the primary advantages of operating a business as a partnership instead of a corporation is that it is a pass-through entity that does not pay either the federal or California income tax. The business’s profits and losses are passed directly through to each partner, who then reports the profit or loss on their tax returns. However, while they are not taxed, California partnerships are required to file state and federal information returns annually and report each partner’s share of the business’s earnings, losses, deductions, and credits.

Federal Form 1065 and Schedule K-1

Each year a partnership or a limited liability company (LLC) operating as a partnership must prepare and file a Form 1065, U.S. Return of Partnership Income, with the IRS to report their financial information. The Form 1065 will report the partnership’s income in addition to such things as operating expenses, employee wages, loan interest paid, and other costs.
When the Form 1065 is submitted to the IRS, it must be accompanied by Schedules K-1 (1065), Partner’s Share of Income, Deductions, Credits, etc. Additionally, a copy of the schedule is given to each partner. The Schedule K-1 is also used to report the partner’s share of the partnership’s capital and the partner’s share of any partnership liabilities. The information reported on the Schedule K-1 is used to prepare the partner’s federal income tax return.

California Form 565 and Schedule K-1

California partnerships must prepare and file a Form 565, Partnership Return of Income, each year to report their financial information to the state. However, all LLCs must file a Form 568, Limited Liability Company Return of Income. The information contained in the Form 565 is similar to that reported on the Federal Form 1065 and will include information on the partnership’s income and expenses during the tax year.
Partnerships also must file with the state Schedules K-1 (565), Partner’s Share of Income, Deductions, Credits, etc. Like the federal Schedule K-1, the Schedule K-1 (565) is used to report the share of the partnership’s income distributed to the partner and is used to prepare the partner’s state income tax return.

Experience In Helping Partnerships File Taxes To Maximize Returns

The skilled staff at Code Accounting are experienced in preparing and filing the state and federal forms necessary to ensure that your partnership is compliant with all applicable tax laws. We also understand that preparing the detailed, accurate financial reports necessary to complete your tax forms will help ensure the partnership’s earnings and capital are fairly distributed among the partners. Finally, if your partnership has any employees, the professionals at Code Accounting can make sure that the necessary employment taxes are being withheld, reported, and paid.

At Code Accounting, we work with partnerships to maximize the value of their assets and provide a long-term strategic plan that keeps your taxes to a minimum. Our experience with partnerships across multiple industries gives us the insight needed to provide your company with solutions to the specific challenges faced by your company. Our team focuses on the operational, tax, and financial issues of your partnership so that you and your team can concentrate your attention on the company’s overall success. Rest assured that filing your partnership’s tax returns with means you’ve minimized your burden and maximized your bottom line.

Accounting Services For Partnerships Include:

● Accounts Payable – Entry of invoices including validation of POs.
● Accounts Receivable – Monthly recurring utilities and rent payments, processing receipts, and sending customer statements.
● General & Month End Accounting Activities – Bank, Mortgage, and Credit card reconciliations, month-end accrued and prepaid expense schedules.
● Prepare/Track Fixed Assets for property and documenting depreciation schedules.
● Management Reporting – Monthly operating reports and variance analysis.
● Budgeting Support & Analysis Services – Prepare budgets, analyze the financial results, and forecasting cash flows.
● Investor Support Activities – Investor reports and data storage.
● Software Upgrade / Changeover Services – Prepare software transition plans, Set-up chart of accounts, and handle full accounting system migration.
● Backlog and Clean-up Accounting Services – Clearing backlog of un-posted historic transactions, correction of existing miscoded GL entries, clean-up of chart of accounts, and reconciling historic transactions with bank and credit card statements.

● Development of accounting systems, including work in process, construction in progress, inventory, overhead allocations, and capital leases. 
● Implementation of tax strategies to reduce or eliminate current year tax burdens.
● Tax consulting including representation before taxing authorities
● Consultation on R&D Expenditures and tax credits.
● Job costing systems design
● Government compliance and organizational paperwork.
● Strategic cash flow planning
● Lender Reporting – Financial statements, insurance policy management, leasing reports, and executive summaries.
● ERISA audits, preparation of Form 5500
● Long term Debt management including accrued interest entires and amortization schedules.