To automate K-1 processing, you can use Lido to extract partner details and box amounts from every Schedule K-1 into a spreadsheet. Upload your K-1s, specify the boxes you need, and Lido returns one clean row per K-1 that you can review and enter into your tax software.
In this tutorial, we will walk you through automating K-1 processing using a sample Schedule K-1 from a partnership.
Lido is the best way to automate K-1 processing because it reads K-1s from any partnership, S corporation, or trust in any layout, including scanned copies, without templates.
Before you start, make sure you have your K-1s saved as PDFs, images, or scanned copies.
If you don't have a Lido account yet, you can create one for free here.
Once you're logged in, create a New File.
Select the Extract Data button at the top of the sheet.
Upload your K-1s by dragging and dropping them into Lido, or click to browse. You can upload up to 100 files at a time. Lido handles K-1 packages from different issuers in the same upload.
For the purpose of this tutorial, we will be using a sample Schedule K-1 (Form 1065). Enter the columns you want to extract: Partnership Name, Partner Name, Tax Year, Ordinary Business Income, Rental Real Estate Income, Interest Income, Ordinary Dividends, and Distributions.
Next, add extra instructions that tie each column to a box on the form. We used: "Extract one row per K-1. Use the amounts from Part III: Ordinary Business Income is Box 1, Rental Real Estate Income is Box 2, Interest Income is Box 5, Ordinary Dividends is Box 6a, and Distributions is Box 19. Format amounts as plain numbers." Once done, click Process All Files.
Review the extracted data against the K-1. Lido returned Ordinary Business Income of 18,640, Rental Real Estate Income of 4,215, Interest Income of 312, Ordinary Dividends of 1,184, and Distributions of 15,000, which match Boxes 1, 2, 5, 6a, and 19 on the sample.
You can edit any cell before you export. Reprocessing is free within 24 hours if you change a column or an instruction.
Click Export to Excel to download your K-1 data as a spreadsheet file. Use the file to enter or import the amounts into your tax software and to keep a record of every K-1 for each client. Clients who also receive W-2s can go through the same steps to capture W-2 wage and withholding figures.
Upload the rest of your K-1s with the same columns and instructions. Each K-1 becomes its own row, so you can sort by client or partnership and check that you have every K-1 before you start a return.
To skip manual uploads during tax season, connect a Google Drive folder, a OneDrive folder, or an email inbox in the Extract Data window, and Lido extracts each new K-1 as it arrives.
Simple K-1s take seconds, but some K-1 packages need a little more setup. Each of these cases is handled with columns and instructions rather than a template.
K-1s from different source returns: Schedule K-1 comes from Form 1065 for partnerships, Form 1120-S for S corporations, and Form 1041 for trusts and estates, and the boxes don't always mean the same thing. On a Form 1041 K-1, for example, Box 1 is interest income, not business income. Name your columns by what they hold and add an instruction for each form type.
Supplemental statements: Many K-1s point to an attached statement for Box 20 codes, Section 199A information, or other detail. Lido reads every page of the PDF by default, so add a column for each statement amount you need. Use Page Range if you only want certain pages.
Multi-state allocations: Fund and multi-state partnership K-1s can allocate income across many states. Add State and State Income columns and keep Extract Multiple Rows per Document checked, and Lido returns one row per state.
Scanned and printed K-1s: Clients often send photos or scans of paper K-1s. Lido's AI reads scanned documents the same way it reads digital PDFs.
Firms also process K-1s in a few other ways, but each method has limits:
Manual data entry: Typing each K-1 into tax software works for a handful of clients. For firms with hundreds of K-1s, it takes days of staff time during the busiest weeks of the year.
Template-based OCR: Traditional OCR data extraction tools need a template for each K-1 layout. Every fund administrator and preparer formats K-1 packages differently, so templates break often.
Tax software import tools: Some tax software can import K-1 data, but these tools often work best with standard layouts and need manual cleanup for supplemental statements.
For a wider comparison, see our list of the best K-1 extraction software.
Now that you know how to automate K-1 processing, you can spend tax season reviewing returns instead of retyping K-1s.
Upload your K-1s to Lido, specify the boxes you need as columns, and click Process All Files. Lido returns one row per K-1 that you can export to Excel.
Yes. Lido extracts data from Schedule K-1s issued with Form 1065, Form 1120-S, and Form 1041 in any layout.
Yes. Lido reads every page of a K-1 package, including attached statements, and you can add a column for each amount you need.
Yes. Lido extracts data from scanned and photographed K-1s as well as digital PDFs.
You can upload up to 100 files at a time, and each K-1 becomes its own row in the same spreadsheet.
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