HopeS
Expert Alumni

Business & farm

If your business generated income and expenses you will need to file a partnership return (Form 1065). Form 1065 is an information return used to report the income, gains, losses, deductions, credits, etc., from the operation of a partnership. A partnership doesn't pay tax on its income but "passes through" any profits or losses to its partners on a Schedule K-1.

 

If you are a partner in a partnership, the information you need to prepare your individual tax return is on the Schedule K-1 you received from the partnership, not on Form 1065. A K-1 can be a complicated form with lots of lines, but TurboTax asks about the data you need to enter. 

 

See the below link on how to enter the K-1 received:

 

How to enter a K-1 in my personal return

 

Also,  you will need the TurboTax Business version for partnership returns if you are responsible for filing Form 1065. You can find the link below: 

 

TurboTax Business

 

If however, your business did not generate any income in the first year but generated only expenses. Turbo Tax will let you enter expenses without having entered any income.  

 

Since this was your first year in business these costs are entered either under Assets/Depreciation or under Business Expenses. 

 

Per IRS Pub 535 Business Start-Up and Organizational Costs: "Business start-up and organizational costs are generally capital expenditures. However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs paid or incurred after October 22, 2004. The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Any remaining costs must be amortized."

 

As long as your start-up expenses are less than $5000, you can add them as Business Expenses. Continue past the expense categories (or choose Other Miscellaneous Expenses) to the page titled "Enter Business Expenses Not Yet Reported" and enter the description & amount (see screenshots below - click to enlarge).

If you have more than $5000 in start-up costs, the remainder is entered under Assets/Depreciation as a capital asset for amortization (TurboTax provides this category for you).

 

Please see the link below for additional information on Business Startup Expenses:

 

Startup Business Tax Tips


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