How do partnerships file and pay quarterly estimated tax payments?

Tax_questionQ) How do partnerships file and pay quarterly estimated tax payments?

A) According to the IRS:

  • Partnerships file Form 1065 (PDF), U.S. Return of Partnership Income, to report income and expenses.
  • A partnership does not pay tax on its income but “passes through” any profits or losses to its partners.  Generally, the partnership is required to prepare and give partners a Schedule K-1 (Form 1065) (PDF), Partner’s Share of Income, Deductions, Credits, etc.
  • The partners report the information from the K-1 on their own returns and pay any taxes due, including estimated taxes.

How to Pay Estimated Tax

Because partners are not employees of the partnership, no withholding is taken out of their distributions to pay the income and self-employment taxes on their Forms 1040 (PDF).  The partners may need to pay estimated tax payments using Form 1040-ES (PDF).

There are five ways to pay estimated tax:

  • Credit an overpayment on your 2012 return to your 2013 estimated tax.
  • Send in your payment (check or money order) with a payment voucher from Form 1040-ES.
  • Pay electronically using the Electronic Federal Tax Payment System (EFTPS)
  • Pay by electronic funds withdrawal (EFW) if you are filing Form 1040 electronically.
  • Pay by credit or debit card using a pay-by-phone system or the Internet.

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