Guides

Estimated Tax on K-1 Income: Partners and S Corp Owners

Checked October 17, 2026 · Educational summary

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General information, not tax or financial advice. We are not the IRS and are not affiliated with it. Check IRS.gov and consider a qualified tax professional. Sources were read on 17 October 2026 unless a line says "search extract"; anything marked expected is our reading of a rule, not a published date. Examples use made-up numbers and are fictional.

A partnership or S corporation generally does not pay income tax itself; the IRS says each partner or shareholder reports their share from Schedule K-1 on their own return. That share can raise your personal tax even if the business keeps the cash, so it belongs in your estimated tax calculation. Publication 505 says your expected total income includes all the income you expect that would have been on line 9 of your 2025 Form 1040, and its annualized worksheet instructions name "your share of partnership or S corporation income or loss".

What the IRS says about pass-through income

IRS Topic 407 says a partnership reports on Form 1065 and does not itself pay income tax. Each partner receives a Schedule K-1 showing their distributive share of income, expenses and other items under the partnership agreement, and reports those amounts on their own return. It says an LLC with more than one owner is generally treated as a partnership unless it elects to be taxed as a corporation. For S corporations, Topic 407 says that, like a partnership, an S corporation generally does not itself pay income tax; most pass income and expenses through to shareholders on Schedule K-1 (Form 1120-S).

Where it goes in the worksheet

Publication 505's annualized worksheet instructions say to enter AGI including "your share of partnership or S corporation income or loss". For the regular worksheet, the practical step is the same: estimate your K-1 share for the year and include it with your other income. The IRS says you can use your 2025 return as a guide for 2026. Our step-by-step guide shows the lines.

The same publication's footnote says net profit from self-employment is found on Schedule C, Schedule F and Schedule K-1 (Form 1065). So a partner's net earnings from self-employment on Schedule K-1 (Form 1065) can feed the self-employment tax lines; an S corporation shareholder's K-1 share does not (see below). Self-employment tax is the sum of social security and Medicare tax (Topic 407 describes Schedule SE for sole proprietors); see our self-employment tax guide.

Partner versus S corporation owner

The IRS treats the two differently for self-employment tax. For a partner (including a member of a multi-member LLC taxed as a partnership), IRS Topic 554 says you are self-employed, and the Schedule SE instructions say to include the net earnings from self-employment shown in box 14, code A of Schedule K-1 (Form 1065); limited partners include only guaranteed payments for services, and whether you count as a limited partner depends on section 1402(a)(13). For an S corporation shareholder, the Schedule K-1 (Form 1120-S) shareholder instructions say: "Your share of S corporation income isn't self-employment income and it isn't subject to self-employment tax." However, the IRS says payments to an officer who performs services for the S corporation are wages, even if the officer is also a shareholder, so a working shareholder may have payroll withholding; see raising W-4 withholding as one way to cover the K-1 share. Reasonable-compensation rules are not covered here.

Timing problem

Taxable K-1 income often arrives after year end, but estimated payments are due during the year. Use the business's own books or a draft K-1 to estimate. If income is lumpy, the annualized method may help; see that guide. If an estimate was off after you learn more, see the amended worksheet guide.

Fictional example

A part-owner of a small partnership (made-up numbers) expects a $60,000 K-1 share in 2026 even though only $20,000 is distributed. The $60,000 goes into expected income, and the partner estimates income tax on it, plus self-employment tax if the amount is net earnings from self-employment for a general partner, using the worksheet. Cash distributions are not the measure; the share of profit is. Using a safe harbor based on last year's tax may be simpler; see the safe harbor guide.

FAQ

Is a distribution the same as K-1 income?

No. The IRS pages we read describe the K-1 as a share of income and other items, not a payout.

Does the partnership pay estimated tax for me?

The pages we read say the partnership itself does not pay income tax; whether any entity-level payment exists is not covered here.

What if the business is in a disaster area?

The IRS disaster FAQs say a partner or S corporation shareholder who relies on K-1 records from an affected partnership or S corporation may be an affected taxpayer; see the disaster guide.

Is the qualified business income deduction relevant?

It may be, but we did not read that guidance and do not apply it.

What we could not verify