Should I file two returns for a small business (general partnership) where I was not paid and personal taxes?

[rileygld]

This past year I started a small business (general partnership) with a friend. We grossed under $5k and netted about $3k in 2020.  Neither of us got paid and the money is still in the business bank account.  Do I need to file for the GP business and my personal taxes or do I even need to file on my personal taxes because I didn't make any money from the business.  Thank you.

[Antomeister]

Although you have not transferred the money to your personal account, you have a "share" in the equity of the partnership. Therefore, since your partnership has retained equity from business operations that you are entitled to, it must be reported. You will need to report only one return (Which will be your personal tax return). As it is not a corporation, you will have to report your % share of the income earned, as well as expenses incurred. To go about doing so on TurboTax Online you would:

Sign in to TurboTax Online and choose your tax return. > Click on the magnifying glass called "Find" > Type "Business" and click on "Business or Professional Activities > Here you will accurately assess amounts incurred only for your share % of the partnership. Say you own 50% of the $3000 earned, you will report $1500. This applies to expenses also.
 

For more information please see our TurboTax article Small Business Tax Tips: Filing a T2125.

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