Partnerships are generally not subject to federal income tax. Instead, the income, deductions, and credits flow through to the partners, who report them on their individual tax returns. However, partnerships may be liable for other taxes, such as employment taxes (e.g., Social Security and Medicare taxes) and certain excise taxes.
Create a Schedule K-1 for each shareholder, detailing their portion of the corporation’s income, deductions, and credits. This information will be required by each shareholder to declare their tax liability.