A tax document used to report the incomes, losses and dividends of a business's partners or S corporation's shareholders. Rather than being a financial summary for the entire group, the Schedule K-1 document is prepared for each partner or shareholder individually. For an S Corporation, Form 1120S is filled out, while for a partnership, Form 1065 is submitted.

While not filed with an individual partner or shareholder's tax return, financial information found in Schedule K-1 is sent to the IRS along with either Form 1120S or Form 1065. Because the tax treatment of partnerships and other business types falling under Schedule K-1 can be different than normal income, investors should pay close attention since income earned from this sort of investing can trigger an alternative minimum tax.