IRS Revises Schedule K-1 to Reduce Filing Complexity
The Internal Revenue Service has revised Schedules K-1 for the 2004 filing season. The revised schedules have been simplified to reduce common errors and the burden associated with preparation and filing requirements.
Income, deductions and credits from partnerships, S corporations and trusts are reported to investors on Schedule K-1. The new partnership and S-corporation Schedules K-1 will be available for the 2004 tax year, and the trust Schedule K-1 will be available for tax year 2005.
The redesigned schedule features many benefits including:
· Layout is easier to read
· Format design is similar to the layout of Form W-2
· Schedule is divided into three distinct parts
· Easier to find specific items
· All distributive items have specific codes assigned
· The most frequently-used distributive items appear first
· Streamlined instructions make completing form simpler
· An asterisk (*) near the code alerts investors to important attachments
· The form can be scanned
The Office of Taxpayer Burden Reduction led a collaborative effort of a team of IRS subject matter experts, with input from external stakeholders in the tax professional community. The revision also includes information gathered from public comments and feedback from focus group participants.
Each year, approximately 25 million Schedules K-1 are filed with the highest number filed by partnerships.
The revised forms are available for download from IRS.gov. Printed copies of the finalized forms and instructions are available by calling the IRS at 1-800-829-3676.
Schedule K-1, Partner's Shares of Income, Deductions, Credits, Etc. (Form 1065)
Partner’s Instructions for Schedule K-1 (Form 1065)
Schedule K-1, Shareholder’s Share of Income, Deductions Credits, Etc. (Form 1120S)
Shareholder’s Instructions for Schedule K-1 (Form 1120S)