K-1

[SJB1216]

I received a K-1 with just a few dollars of income.  When I am attempting to submit my return I am receiving 2 error messages.  First, on line 16 it states "schedule K-3 is attached if checked" and the box is checked - Message is "schedule K-3 will be available in a future release" - we are talking about less than $10 of income here.  Second - line 20Z - Section 199A info has $7 next to it - yet I receive a message "Box 20 Code Z has been selected but no Sec 199A income has been entered on Statement A"

How do I handle these so I can submit ?

[PatriciaV]

Yes, Smart Check will not let you proceed because Schedule K-3 has been delayed in its release. Once the form is ready, you will be able to proceed past this point and e-file your return.

As a work-around, you have the option to e-file your 1040 return now and amend later in the year when the form is available. However, if this income relates to foreign assets, you will need to wait until Schedule K-3 is released and updated in TurboTax.

Otherwise, to allow your 2021 personal tax return to be e-filed without Schedule K-3, return to the Schedule K-1 entry for this investment. Uncheck the box for Box 14 and continue. This change should clear the Federal Review process and allow you to e-file.

Once you receive your refund, or are certain that your return has been accepted and processed by the IRS, you can check for TurboTax updates until Schedule K-3 has been released. At that point, you may amend your return.

Second issue: Certain items (generally labeled "Other") on your K-1 may need to be entered in different places in TurboTax. Consult the instructions that were included with your Schedule K-1. These should tell you the form and line where the amount should be entered.

For Section 199A from Box 20Z, follow these instructions: How do I claim the Qualified Business Income Deduction as a Schedule K-1 Recipient?

More info: How do I amend my 2021 return?

[Warri0r74]

When will TTax have the software fix so that K-3s are handled correctly and I can file my taxes?

[Cynthiad66]

TurboTax is waiting for the IRS to finalize the forms and release for all taxpayers and Tax software.

Since IRS is not requiring the form for 2021, we suggest that you uncheck the box and file your return. One question, is there anything recorded on the K3 such as a foreign tax credit? If so, you may wish to amend your return once the K3 is available in Turbo Tax to claim the credit.

Most forms K-2 and K-3 forms do not need to be filed this year. The IRS announced on Tuesday February 15, 2022 that most K2/K3 reporting for 2021 can be delayed until the 2022 tax return filing.

This is an extract of the IRS announcement:

@Warri0r74

[daddiowen]

Regarding K-3:  The IRS finalized form K-3 in December 2021.  It seems like TurboTax engineers need to incorporate that form sooner than later.  My friend is more than ready to file, so someone needs to put a fire under the forms folks to get that integrated.

[PatriciaV]

Please note that the issuance of a K2/K3 is not a Turbo Tax issue, it is a IRS issue. Even after the final forms are released, they must be integrated into the software, which does take time. According to the IRS, these are the release dates for these forms, based on type of Business Entity.

Form 1065                        March 20, 2022

Form 1120-S                     Mid-June 2022

Form 8865                        January 2023

For more info, see this IRS link.

[BillO_14]

I apologize in advance if this is not how to post a question. I've completed our taxes in TT Self Employed and we owe some in Federal tax. My wife was a unit holder in a company that sold VERY late in 2021, so we have not received a final K-1 for her disbursement. We've been told to file for an extension. Should we file for the extension and pay the small amount owed now OR add in the large estimated tax payment, so we don't get hit with underpayment penalties? I heard that the IRS would like at least 90% of what may be owed to them. We received an informal "draft" K-1 from the holding company that only has a Line1 and Line 9a entry. We should receive a final Sched. K-1 in early May '22. Do you have thoughts? Thank you in advance.

[Vanessa A]

You should try to pay all of what you believe will be due when you file your actual return.  The extension is an extension of time to file, but it does not give you additional time to pay.