Hello and thank you in advance for any help or advice,
Background: In Aug of 2021 my step mother and I entered into a general partnership with a business license for creating handmade jewelry and gifts online thru marketplaces. We did not obtain a business bank account and paid for each of our own expenses out of our personal money as we create different items and require different materials. I personally have been handling all of the online aspects such as product listings, marketing and social media so I have larger out of pocket expenses. Because we were just starting and had a family emergency come up shortly there after we didn't keep formal books though I do have receipts for items related to such as does she for her end. I also "contributed" personal equipment to this such as my laptop, a brand new die cutting machine and some materials bought prior to obtaining the business licenses with the intent to use them for business. Here is where I am getting a bit turned around - it seems like we were acting more like sole proprietors rather than a partnership, so I am having a hard time preparing the 1065 and individual schedule k1 forms since everything was done with personal accounts rather than a general business account. We also had not yet generated enough in sales to be reimbursed directly from the "company". Most information I see on partnerships is in regards to large companies or those with shareholders.
Can someone please point me in some direction as to whether a 1065 is still necessary and what might be a better way to proceed or all of my expenses to be listed under unreimbursed business expenses? We are also doing this each in our separate homes with clearly dedicated workspaces. I have found the formula for calculating home office space used but again am confused if that should go under unreimbursed business expenses.
We are coming in stronger this year and will obtain actual accounting software and hopefully a business account but because of how we started again we were purchasing as individuals rather than together.
Thank you in advance for any help or direction that can be provided.
