I missed the deadline to file k1 form and neither did I file for an extension. Can I still file it late? I didn’t earn very much from the partnership for the fiscal year 2020 only $245. Is there a penalty and will this affect my credit? Thank you very much!
Are you doing the books for the business, or filing a personal tax return?
If you are doing the books for the business, then you’re already late. The partnership was required to file a 1065 return and issue K1 forms to all owners/partners by March 15th (or file an extension). At one time the IRS was automatically waiving the late penalty if it was the first time you missed the deadline (ask me how I know), but I don’t know if they’re still doing that.
If you are an owner/partner and received a K1 form from the business for your share of the profit (or loss), then you don’t file that separately. You include it on your personal 1040 tax return along with all of your other personal income. The deadline for personal returns was extended until May 17th this year so you haven’t missed that deadline, and you could file an extension and have until October 15th.
If you already filed a personal return and failed to include your K1 form, then you’ll need to file an amendment. As an example, $245 of income would make a difference of about $54 on your tax owed (or refund amount) if you’re in the 22% bracket. So the IRS WILL notice the missing income and WILL expect you to pay the difference plus penalties and interest when they catch it. You can avoid penalties and interest if you amend before May 17th and repay the difference if needed.
You don’t file Form K-1 separately from your regular tax return. The partnership or S Corp was required to file their tax return by 3/15 or file an extension. Your personal tax return is due May 17, so it’s not late yet. If you already filed your return, you will need to file an amended return and pay any tax due by May 17 to avoid penalty. It does not affect your credit.