What Is a Schedule K-1 Federal Tax Form?

By Matthew DiLallo – Updated Jun 9, 2025 at 12:16 AM EST

Key Points

Schedule K-1 tax forms are issued by MLPs, enabling investors to report their share of income and losses.
Late issuance of Schedule K-1 can delay tax filings, sometimes requiring extensions.
These forms help avoid double taxation, potentially lowering taxable income for recipients.

A Schedule K-1 is a federal tax form that business partnerships and S corporations use to report a partner's share of its income, losses, capital gains, dividends, and other items.

As pass-through entities, they pass their income and losses through to their partners and shareholders, who pay taxes on any income at their individual rate (instead of the partnership paying taxes on that income at the corporate level). Many investors will receive a Schedule K-1 if they invest in a master limited partnership (MLP) or other limited partnership (LP), such as a real estate partnership.

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Person handing over a document. — Image source: Getty Images.

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Schedule K-1 federal tax form — Image source: IRS.

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How to Calculate Tax on W-9 Income

Form W-9 doesn't usually result in income taxes withheld, but there is an exception.

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For example, let's say it sent a K-1 to a hypothetical investor who owned 300 units in 2023. The Schedule K-1 reported in box one that the investor's share of the entity's ordinary business income was $120. It didn't report any other income, losses, gains, interest, credits, or dividends.

Meanwhile, box 19 reported that the investor earned $595 in distributions from the MLP that year. As a result, the investor reported $120 of income on their taxes. They had a prior-year passive loss, which they recorded against this income, enabling the investor to defer taxes on the entire $595 in distributions that year.

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About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

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Matt DiLallo has positions in Enterprise Products Partners. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.