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:
- Go to Check Return ⮕ Forms ⮕ US ⮕ Worksheets.
- Scroll to Self-Emp. Worksheet
How do I enter adjustments or overrides for self-employment income?
There are SE income adjustments and overrides inputs.
- Go to Input Return ⮕ Schedule K ⮕ Other Schedule K Items.
- Select the Taxes tab.
- Scroll down to the Self-Employment section.
- 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)
