K1 earnings on their personal tax returns on Form 1040 Schedule E.Īll partnerships should have a written partnership agreement. Partnerships file aįorm 1065 with the IRS and issue K-1 to partners. “passes through” profits or losses to its partners. TAX REQUIREMENTS: The business does not pay income tax. Shared profits, according to ownership, not effort. Potential partnership incentives forĭISADVANTAGES: Joint and individual liability. TAX REQUIREMENTS: You report your business income andĮxpenses on a Form 1040 Schedule C on your personal tax return.ĪDVANTAGES: Easy and inexpensive like a Sole Proprietorship. Easy toĭISADVANTAGES: Unlimited liability. Generated income goes to owner to keep or reinvest. Sole Proprietorship and DBA (Doing Business As)ĪDVANTAGES: Easiest and least expensive for of ownership.There are multiple forms to choose from.In order to do business, you must create a The importance of seeking legal counsel.How is the owner paid, taxed, and what type of.Offer an overview of other legal considerations.The opportunities and challenges associated with Understand the various legal forms of a business and.

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