Here Come the K-1’s!

It’s that time of year again. Institutional investors are preparing for the onslaught of receiving hundreds, if not thousands, of K-1 tax forms from their investment partnerships. For many firms, it is a dreaded task, as the complex data must be manually extracted from various K-1 forms and supporting notes. This data is then manually aggregated and typically reconciled to an internal, tax-adjusted, accounting system. The resulting data is then used to prepare K-1 forms for the Investment firm’s clients. Due to the format of the K-1 files, typically PDF or scanned images, the process is almost always manual as few applications can handle the complexity of extracting data from PDF documents, scanned images or the complex “notes” section of the documents. Overall, the process is terribly inefficient, potentially inaccurate, and very stressful. But what if there was a better way to process your K-1’s?

Automation has made data processing much less painful. Firms are increasingly using automated systems for the retrieval, extraction, and integration of data to save time and ensure accuracy. While these systems are adept at typical, relatively simple processing, they are less effective with complicated files such as K-1’s, which may vary in structure. To efficiently extract data from the varied structures of K-1’s, a more robust system is required.

At Smonik, we have developed an advanced system to process your K-1’s. Generic data extraction tools exist that can extract data from the basic K-1 form (Page 1), but fall short when it comes to the detailed Notes pages which are a necessary element to complete tax filings. Whether it is the breakout of Interest Income (Box 5), Gain-Loss (Box 9a), Foreign Transactions (Box 16), AMT (Box 17), UBTI, or ECI, Smonik can automatically extract the required data and provide it in any output format, simplifying integration with an internal or external application. Smonik even extracts the complex Form 926 data, PFIC data, and State Tax information provided in the notes to your K-1.

Our turn-key data management service, SMONIK AUTOMIK, was designed to take your complex documents, extract any data, and deliver it to you in your desired format, making it an ideal solution for efficiently processing K-1 forms.

Contact us to learn more about Smonik’s painless K-1 processing solutions or click Chat below if you have any questions.