K-1 Received without K-3

[marshg246]

I received my 2022 K-1 today from Chesapeake Granite Wash (OK Oil Partnership).  It has a checkmark saying that the K-3 is attached but it isn't.  The company says that it will mail them May 30, 2023.  TT won't let me complete my taxes with the checkmark.  Is there some way around this other than getting and extension?

[JohnB5677]

Filing for an extension is the safest option.  However, there is an exception stating in 2022 regarding K-3's.

"New exception to completing Schedule K-3.

Under a new exception, in certain cases, partnerships with no or limited foreign activity are not required to furnish Schedule K-3 to you for tax years beginning in 2022. See Domestic Filing Exception in the Partnership Instructions for Schedules K-2 and K-3 (Form 1065)."  New exception to completing Schedule K-3

Also see:  Domestic filing exception (exception to filing Schedules K-2 and K-3)

If you choose to uncheck the K-3 box, I suggest filing a Form 8275  .

Form 8275 is used by taxpayers and tax return preparers to disclose items or positions, except those taken contrary to a regulation, that are not otherwise adequately disclosed on a tax return to avoid certain penalties.

Form 8275 is not supported by TurboTax, and it cannot be Efiled.  However, you can mail your return and use the link below to prepare the 8275.
Please see About Form 8275, Disclosure Statement for instructions and the FORM.

Your Federal tax return goes to a different location depending on the state that you live in.  See this list to determine the location for you.

 Where to File Paper Tax Returns (irs.gov)

 If this does not completely answer your question, please contact us again and provide some additional details.

[marshg246]

Understood

I pay estimated taxes to both Fed and State.  If I were able to complete my taxes now, I would owe a little to both.  Do I just make additional estimated payments now for 2022 to cover what I will owe when able to file my taxes?

[JohnW152]

Maybe -- it's an option you should explore.

If you’ll only owe a small amount to each there’s probably no reason, since you probably wouldn’t be subject to an underpayment penalty.

You can see the factors that would’ve resulted in an underpayment penalty this year in Underpayment Penalty for 2022 in the IRS’ Publication 17.  Also bear in mind that the figures noted typically remain the same from year to year. 

The IRS levies underpayment penalties if you don't withhold or pay enough tax on income received during each quarter. Even if you paid your tax bill in full by the April deadline or are getting a refund, you may still get an underpayment penalty.

Please see the TurboTax Help articles Do I need to make estimated tax payments to the IRS? and Can TurboTax calculate next year's federal estimated taxes? for more information.

[marshg246]

I spoke with the Virginia tax people.  They said definitely don't pay extra estimated, but do pay the remaining tax as an extension payment and don't send the extension request.

I spoke with the IRS and they said basically the same.

Since I don't know the final tax due, I padded what Turbo Tax said and paid both.