Schedule K-1 is a U.S. tax form used to report each partner's, shareholder's, or beneficiary's share of income, deductions, credits, and other tax items from pass-through entities such as partnerships, S corporations, and some trusts and estates. Recipients use information from Schedule K-1 to complete their individual tax returns. K-1 income can include ordinary business income, interest, dividends, capital gains, rental income, and other categories, each of which may have different tax treatments. For financial and insurance planning, Schedule K-1 is important because it reveals complex income streams, ownership interests, and cash flow patterns that affect suitability and product design.

Advisors working with business owners, private equity partners, and trust beneficiaries often request recent Schedule K-1 forms to understand a client's income composition and variability. Underwriters may ask for K-1s when evaluating financial underwriting for large life insurance cases, key person coverage, or buy-sell planning. K-1 data helps document insurable interest, justify face amounts, and assess the stability of income that will support premium payments. Advisors coordinate with CPAs to interpret K-1 entries and to ensure that recommended strategies align with the client's tax situation. Familiarity with Schedule K-1 enables more accurate, sophisticated planning for high-income and closely held business clients.