QUICK ANSWER
The best tax software for partnerships and multi-member LLCs in 2026 are TurboTax Business, H&R Block Business, TaxAct Business, and Drake Tax. Partnerships (and multi-member LLCs taxed as partnerships) file Form 1065 and issue K-1s to each partner — a more complex return than sole proprietor or S-corp filings. TurboTax Business ($189.99) provides the most user-friendly interface for partnership returns, while TaxAct Business ($124.99) offers competitive pricing for partnerships comfortable with a more manual workflow.
Key Takeaways
- Partnerships file Form 1065, not Schedule C — unlike sole proprietors (who file Schedule C on their personal return), partnerships file a separate business tax return (Form 1065) and issue Schedule K-1 to each partner showing their share of income, deductions, and credits; this K-1 is then reported on each partner’s personal return.
- Multi-member LLCs are taxed as partnerships by default — unless a multi-member LLC makes an election to be taxed as an S-corp or C-corp, the IRS treats it as a partnership; this means filing Form 1065 and K-1s regardless of whether your state documents call the entity a “partnership” or “LLC.”
- K-1 complexity increases with the number of partners and special allocations — partnerships with special allocations (different profit/loss splits for different items), guaranteed payments to partners, or international partners have significantly more complex K-1 requirements that may require a CPA rather than DIY tax software.
- Most consumer tax software does not support partnership returns — TurboTax Deluxe, H&R Block Deluxe, and most consumer-grade tax platforms don’t support Form 1065; you need the specifically labeled “Business” version of these products, which are desktop (not online) applications.
Best Tax Software for Partnerships
1. TurboTax Business — Best for Ease of Use
TurboTax Business ($189.99, desktop software) provides the most intuitive interface for partnership returns (Form 1065) among consumer-grade tax products. The step-by-step interview format guides partners through income allocation, deduction categories, K-1 generation, and state return preparation without requiring deep tax knowledge. TurboTax Business generates up to 5 partner K-1s at no additional cost (additional K-1s may require manual preparation for larger partnerships). The software imports QuickBooks data directly, reducing manual data entry for partnerships already using QuickBooks Online or Desktop.
Best for: Small partnerships with 2–5 partners, simple equal profit/loss splits, and no complex special allocations who want guided step-by-step partnership return preparation.
2. TaxAct Business — Best Value for Partnership Returns
TaxAct Business ($124.99 for federal, state returns additional) offers solid Form 1065 support at a lower price point than TurboTax Business. The platform is more manual in its approach than TurboTax’s interview-driven workflow, making it better suited for partnerships with some accounting background or an accountant reviewing the completed return. TaxAct Business includes unlimited K-1s at the base price, making it more cost-effective than TurboTax for partnerships with more than 5 partners.
Best for: Partnerships with accounting-savvy partners or CPA oversight who want competent Form 1065 software at a lower price, particularly partnerships with more than 5 partners where K-1 volume matters for pricing.
3. TurboTax Business + Personal Bundle — Best for Partners Who Also File Personally
TurboTax offers a Business + Personal bundle that includes TurboTax Business (for the partnership’s Form 1065) and TurboTax Premier (for each partner’s personal return that will include the K-1 income). For partnerships where partners also have complex personal returns (investment income, rental properties, stock sales), this bundle simplifies the process of filing both the partnership return and the individual returns that report K-1 income.
Best for: Partnerships where partners want to prepare both the business return and their personal returns using the same software ecosystem, particularly those with investment income or other complexity on their personal returns.
Partnership Tax Software Comparison
| Software | Price (Federal) | Form 1065 | K-1 Generation | Best For |
|---|---|---|---|---|
| TurboTax Business | $189.99 | Yes | Up to 5 included | Ease of use |
| TaxAct Business | $124.99 | Yes | Unlimited | Value, more partners |
| H&R Block Business | $89.95 | Yes | Included | Budget-conscious partnerships |
Recommended Resources
TurboTax Home & Business 2025 — covers preparing partnership-related personal tax returns including how to report K-1 income, passive activity loss rules, and partner basis tracking on your individual return.
Accounting All-in-One For Dummies — covers partnership accounting fundamentals: partner capital accounts, profit and loss allocation, guaranteed payments, and how partnership financial statements flow into the Form 1065 tax return.
Frequently Asked Questions
Does a partnership pay income tax directly?
No — partnerships are “pass-through” entities that don’t pay federal income tax at the entity level. The partnership files Form 1065 (an informational return) and issues K-1s to partners showing each partner’s share of income, deductions, credits, and other tax items. Each partner then reports their K-1 income on their personal federal income tax return and pays tax at their individual rate. Some states impose entity-level taxes on partnerships, so check your state’s rules in addition to the federal pass-through treatment.