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Understanding Schedule K-1 self-employment income for partners and LLC members in ProConnect

SOLVEDby Intuit1Updated 1 month ago

Below are answers to frequently asked questions about self-employment income for Form 1065, Schedule K-1 in the Partnership return.

What’s included in self-employment income for partners?

The amounts included for self employment (SE) income on the Schedule K-1, box 14 depend on the type of partner selected in under Partner Information, as well as amounts allocated to that partner:

  • For both general and limited partners, guaranteed payments are considered self-employment income.
  • For limited partners (and LLC members), nothing else, including overrides, can affect SE income.
  • For General partners and LLC Managers, SE income also includes the distributive share of partnership income.

This input is on Input Return Partner Information Partner Information. Scroll down to the Miscellaneous Info section and check the box labeled General Partner/LLC Manager.

How does the program calculate self-employment income?

The program creates a worksheet to show the calculation of net earnings from self-employment. 

Follow these steps to view the Self-Employment Worksheet:

  1. Go to Check Return Forms US Worksheets.
  2. Scroll to Self-Emp. Worksheet

How do I enter adjustments or overrides for self-employment income?

There are SE income adjustments and overrides inputs.

  1. Go to Input Return Schedule K Other Schedule K Items.
  2. Select the Taxes tab.
  3. Scroll down to the Self-Employment section. 
  4. These adjustments and overrides can be specially allocated on the Special Allocations tab.

The worksheet also gives you an adjustment of certain items, including:

  • Plus Certain Rental RE Income
  • Plus Passthrough SE Income (Loss)
  • Plus Passthrough Ordinary Income (Loss)
  • Less 4797 Gain or (Loss)

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