• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube
Big Ideas for Small Business logo

Barbara Weltman

Big Ideas for Small Business, Inc.

Whitepaper download

Subscribe and download our eBook, "150+ Tax Deductions for Small Business A to Z."

This field is hidden when viewing the form
Get the:

  • Home
  • About Us
  • Big Ideas For Your Business
    • Idea Of The Day ®
    • SMB Legal
    • SMB Taxes
    • SMB Financial
    • Small Business
    • Newsletter Archive
  • Services
  • Books
  • Blog
  • Multimedia
    • Videos
    • Radio Shows/Podcasts
  • Be a Guest Blogger

The Latest Tax Statistics on Partnerships and LLCs

December 16, 2021 / By Barbara Weltman

Tax Statistics on Partnerships and LLCsA partnership is not taxpaying entity, but files an annual tax return, Form 1065, to report income, deductions, and other items. These items pass through to partners, who may be individuals, other partnerships, corporations, or other entities. Partners report their allocable share of these items on their own tax returns.

Tax statistics from the IRS show that the number of partnerships (including limited liability companies that file tax returns as partnerships) in the U.S. declined for the first time since 1993. For 2019 (the most recent year for statistics), there were 3.8 million partnerships (4.7% less than in 2018), representing more than 25.3 million partners (down from 27.4 million partners the year before). Statistics from 2018 were covered in a prior blog.

Here are some other interesting tax-related statistics about these filers:

  • Limited liability companies (LLCs) with 2 or more members accounted for the majority (71.5%) of all partnership returns. This is the 18th consecutive year that LLCs dominated the number of partnership returns filed. The number of LLC members grew to 10.2 million (a 5.25% increase over 2018).
  • Limited partnerships represented only 10.8% of all partnerships. Nonetheless, they reported the most profits (30.3% of all returns) and the largest share of partners (37%).
  • Total receipts (revenue) for filers increased by 5% from the previous year to $8.1 trillion. But profitability was down by 14%, increasing by 8.9%.
  • More than 97% of all partnership returns were filed electronically.

Which industries dominate the number of partnership returns and results? Real estate and rental and leasing accounted for about half (50.8 percent) of all partnerships and nearly a third (32.7%) of all partners. The finance and insurance sector reported the largest shares of total net income (loss) (57.9%), total assets (57.3%), and total receipts (24.2%) for 2019.

Why were profits down? There are always a number of reasons why net income for tax purposes declines. For the real estate industry, statistics show the main reason was an increase in expenses. Remember: these statistics are pre-pandemic.

Why do these statistics matter?

S.N.D. North, past president of the American Statistical Association, said in 1910: “The science of statistics is the chief instrumentality through which the progress of civilization is now measured, and by which its development hereafter will largely be controlled.” How prescient he was.

Statistics are often the underpinning of tax law changes, or at least used to justify changes spurred by policy or politics. Annual statistics from the IRS on partnerships and multi-member LLCs shows the growth (or lack of growth) of business in the U.S. The statistics reflect what’s going on in the economy.

Final thought

With the number of new business startups growing (more than 4 million from January through September 2021), the choice of entity for new companies becomes more important than ever. It’s worth noting that the number of S corporations still outstrips partnerships (including LLCs filing as partnerships).

According to the latest IRS Data Book for FY 2020, there were 4,470,095 partnership returns filed as compared with 5,044,303 S corporation returns. The debate between becoming an S corporation or limited liability company continues…

Tags business startups IRS data LLCs partnerships small business tax statistics

Primary Sidebar

Categories

  • General Business (506)
  • Guest Blog (113)
  • Homepage (23)
  • Small Business (1,003)
  • SMB Financial (329)
  • SMB Legal (66)
  • SMB Taxes (326)

Barbara’s Recent Posts

  • Mid-Year Business Planning for 2025 July 1, 2025
  • 10 Ideas for Coping with Cash Flow Challenges June 26, 2025
  • 5 Insurance Traps to Avoid June 24, 2025
  • Creating a Feng Shui Office Layout for Your Business June 20, 2025
  • Scaling Your Business by Optimizing Social Media Marketing June 19, 2025
  • The Timeless Value of Business Cards in a Digital World June 18, 2025
  • What Does the Latest IRS Data Book Tell Us? June 17, 2025
  • Business Advice from Famous Dads June 12, 2025
  • How Important Is Higher Education for Small Business Owners June 11, 2025
  • Business Planning in a Period of Uncertainty June 10, 2025
  • 9 Smart Financial Decisions for Business Owners in Retirement June 6, 2025
  • Preview of Tax Changes this Year: Actions to Take Now June 5, 2025
Awarded Top 100 Small Business Blog medal (link will open in a new window or tab)
Marquis Who's Who 2023 Badge
Top Small Business Blogs (Link will open in a new window or tab.)
8 Financial blogs small business Owners Need to Read. Invoice home.  (link will open in a new window or tab)
Best Small Business Blog, Expertido.org
Top 50 Small Business Blogs 2018
Best Small Business Blogs
BizHumm Top 100 Business Blog Award to Barbara Weltman
FitsSmallBusiness.com: Award for Best Small Business Blog 2017 (link will open in a new window or tab)
FitsSmallBusiness.com: Award for Best Small Business Blog 2016 (link will open in a new window or tab)

Footer

Big Ideas for Small Business logo

Small business ideas, business tax news and small business consulting from Barbara Weltman to provide business owners with the information they need to succeed. Visit our small business blog, Idea of The Day®, small business books and articles on small business taxes, small business finance and small business legal advice.

Contact Us

[email protected]

(772) 492-9593

gacor maxwin situs slot thailand terpercaya situs slot gacor situs gacor akun pro thailand slot bandar togel terpercaya

Latest Tweets

bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
July 2

Cash App, Zelle and Beyond: How to Choose a Money Transfer App https://bit.ly/3G9LEeq

Reply on Twitter 1940524229482402032 Retweet on Twitter 1940524229482402032 1 Like on Twitter 1940524229482402032 1 Twitter 1940524229482402032
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
July 2

Listen Before You Ask, Business & Personal

Reply on Twitter 1940509951228891259 Retweet on Twitter 1940509951228891259 1 Like on Twitter 1940509951228891259 1 Twitter 1940509951228891259
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
July 2

Mental Clarity: The Most Underrated Key to Business Growth During Tough Times https://bit.ly/443P627 #smallbusiness #leadership

Reply on Twitter 1940461314708492485 Retweet on Twitter 1940461314708492485 Like on Twitter 1940461314708492485 Twitter 1940461314708492485
Load More

Copyright © 2008–2025 Big Ideas for Small Business, Inc  |  Designed by Hudson Fusion

  • Privacy Policy
  • Sitemap