Question

Multi-member LLC: where do I report my personal expenses & deductions after K1 is issued?

Forum|Forum|6 years ago
July 24, 2019
2 replies
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Hi All,

I'm a first-year owner of a multi-member LLC. I have my K1 which shows me my share of the partnership income. In the past as a sole proprietor I had used Schedule C to deduct my expenses (home office deduction, mileage, utilities, etc) and was comfortable with the approach. In this new circumstance as the owner of a multi-member LLC, where/how do I report all my personal expenses & deductions based upon my K1 income? Are the rules generally the same regarding type of deductions allowed as for sole proprietors? Any tips or pointers to relevant publications, sites, etc would be greatly appreciated. Many thanks in advance!

Hi Palms

Read publication 587 and the instructions for Sch E for line 28 that discuss unreimbursed partnership expenses and you can see if the partnership will reimburse you for expenses.....easiest way to do it.

Carl11_2

Are the rules generally the same regarding type of deductions allowed as for sole proprietors?

No, they are not the same. Not even close.

Any tips or pointers to relevant publications, sites, etc would be greatly appreciated.

Basically, all expenses need to be paid out of the partnership. That's the simplest/easiest way to do it. That's because with the massive tax law changes that took effect in 2018, there are many expenses that can "ONLY" be paid out of the partnership in order to not be counted as taxable income.