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11489: 1065 - Entering Guaranteed Payments for Partners


1065 Partnership

Where do I enter guaranteed payments to partners in a 1065 return?

 

Beginning in Drake15

Guaranteed payments are payments made to partners without regard to the partnership's income. These predetermined payments are often a form of salary for working partners and may be subject to self-employment tax.

Total guaranteed payments for partners can be entered on one of the line 10 entries on the DED screen. The options are Guaranteed payments for services or Guaranteed payments for capital:

or on the 8825 screen, line 15Guaranteed payments:

An entry on either field allocates the guaranteed payments to each partner according to the partner's percentage entered on each partner's K1 screen.

If the guaranteed payments need to be specially allocated, do this on the SA window link on line 4 of the K screen. For more information about data entry of the SA window, see "1065 - Partner Special Allocations" in Related Links below.

Drake14 and prior:
To avoid a message page relating to guaranteed payments, complete the following steps:

  1. Enter the total amount of guaranteed payments on the DED screen, line 10Guaranteed payments to partners:

Or enter the total on the 8825 screen, line 15Guaranteed payments:

  1. For each partner receiving guaranteed payments enter the amount on line 4 of the partner’s K1 screen.

Note: If you do not enter the payments in the appropriate manner you may see error message 1011.

Notes:

  • Partner health insurance premiums paid by the partnership may also be included in the calculation of line 10. To avoid message 1011 verify entries on the K1 screen for each partner receiving the insurance. For more information about data entry of partner health insurance payments, see "1065 - Entering Partnership Payments for Partner’s Health Insurance" in Related Links below.
  • An adjustment field for line 4 is available on screen K. Entries here will adjust amounts flowing from the DED screen or the K1P screen (for income/loss coming in to the partnership from another partnership).
  • The above information is only related to partnership (1065) returns. There are no guaranteed payments for 1120S returns. 

For more information about guaranteed payments, refer to Publication 541, Partnerships.


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