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K1 Form 1065 and self employment tax question

Forum|Forum|2 years ago
March 3, 2024
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I have a generated from my accountant K1 where I am a general partner and my box 1 is a loss, but my guaranteed payments for services is much higher. I'm doing my personal taxes now and Turbotax is saying I don't have to pay self employment tax and that matches my K1 where box 14 is empty, but shouldn't I have to pay self employment tax?

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Best answer by PatriciaV

You may wish to contact the accountant who prepared the Partnership return to verify that your guaranteed payments were not reportable. Generally, a general partner of a partnership would have an amount in Schedule K-1 Box 14. That amount would flow to the Self-Employment Taxes worksheet to calculate the SE Tax due.

PatriciaVAnswer

You may wish to contact the accountant who prepared the Partnership return to verify that your guaranteed payments were not reportable. Generally, a general partner of a partnership would have an amount in Schedule K-1 Box 14. That amount would flow to the Self-Employment Taxes worksheet to calculate the SE Tax due.

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K

KSrB2000Author

Thank you for the help Patricia. That's what I thought. I asked the accountant about it and this is the response I got.

"Guaranteed earnings are subject to SE tax automatically. The box 14 is for box one flow-through residual income not guaranteed through direct payments."

I don't really understand it though. Does this make sense to you? Is there a better question I should be asking them?

PatriciaV

While your accountant is partially correct, guaranteed payments are added to the flow-through income to arrive at the amount in Box 14a.

Per the IRS Instructions for Form 1065 Schedule K-1 Line 14a, the Worksheet for Figuring Net Earnings (Loss) from Self-Employment lists Guaranteed payments on #4a.

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