Partnerships involve two or more people who share in the ownership of a single company. In a partnership each owner shares a portion of the responsibilities for running the business as well as any profit and losses associated with the business. There are three general types of partnerships:
General Partnerships assume that all management responsibilities, profits and liabilities are evenly distributed through all partners involved.
Limited Partnerships are arrangement where partners can have limited liability and management responsibility within the partnership. Equally, these partners also have a limited share of the profits of the company.
Joint Ventures act as general partnerships but for a limited time or for a particular project.
Partnerships do not file for income tax. Instead, income and deductions are filed through the partners themselves and will go through their personal returns. Each partner includes their income and losses along with their personal tax returns.
Here is the process:
Partnerships can be straightforward compared to corporate tax returns. However, you need to be sure your returns are processed properly because they are tied to your personal returns. Our firm will ensure your partnership is applied to your personal return legally and effectively to maximize your return and reduce your losses.
Contact us today and learn how our CPA firm can support your Corporate or Individual Tax and Financial needs.