20:36 here. You can't get in trouble if you report the income but misclassify it.. The IRS goes after people who don't declare their income. In your case you'll be declaring it, though maybe as the wrong type. Any reasonable person can see this is complicated, so at worst the IRS will send a bil for taxes owed. Nonetheless, ask a CPA.

Treat it as a 1099.. now the thing I"m not sure about is if it's a 1099-DIV (and qualified dividends = lower rate), or a 1099-MISC. Pay a tax lawyer or account for 1 hour of their time -- all you really need to figure out is how to classify this.

When my husband was a non-equity and then an equity partner at a small firm, we didn't get his K-1 until July most years. Just file an extension and send an estimated payment with it. Then find an accountant for after the K-1 actually comes.

My husband has a fellowship that is taxed as an award, not a salary. We pay quarterly taxes and all he gets is a letter with a total amount paid that year. It is on letter head, but always looks fake / shady to me. We've filed for 3 years that way with no issues - and I have 4 states, stock options, charitable deductions, and we pay AMT, so I figure if we were going to be audited by now we would have.

You need to hire an accountant...get your husband to ask the other partners who they use. Don't try to do this yourself, it's clear from your OP that you're going to screw it up...not to be mean, just being real.

When I was a non equity, I received a K-1. Huge PITA. Get an extension now.

Non equity partners can receive k-1s and be expected to pay self employment tax.

With your small mom-and-pop shop, though, who knows? Since they're withholding nothing, could they be treating him as independent and just giving him a 1099? That would be odd but not totally out of the realm.

Don't consult DCUM. Consult a professional.

A non-equity partner is typically an employee. The forms of income are salary and bonus, not equity participation. So the income statement would be a W-2, and you would proceed as in years past.

Different firms have different titles: at some firms, a non-equity partner is "of counsel" or some such. Those folks are W-2'd employees.

Anonymous wrote:He should get a K-1 form. That is what my husband gets as an equity partner. His firm hasn't issued them yet, but we expect it by next week.

OP said he's a non-equity partner. I don't think they get a K-1 unless they're equity.

Have you considered getting a professional due your taxes. It is especially important to make sure you pay more than the safe harbor amount in quarterly taxes going forward. The penalties are really high if you screw this up with K-1 income.

He should get a K-1 form. That is what my husband gets as an equity partner. His firm hasn't issued them yet, but we expect it by next week.

Hopefully a fellow DCUMer can help out. Slightly different scenario. My husband made non-equity partner at his firm in 2013. The firm paid him by monthly check and didn't take anything out. We then paid the quarterly estimated taxes for state and federal. It's a small boutique firm so kind of a mom and pop shop with just a DC office and not much help.

For doing taxes- I imagine there has to be some form he gets for reporting his income. He hasn't received anything from the firm though. Does anyone know the form he needs to get/ask for? I don't think it would be a W-2, but with the whole estimated taxes, I'm already way past my basic turbotax knowledge. Trying to figure out how exactly I enter his income, but that's probably driven by the form he gets. Thanks!