Where to enter guaranteed payments to partners in a 1065

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 the DED screen or the 8825 screen.

If using the 8825 screen, make an entry on line 15. The DED screen, line 10 has two options: 

• Guaranteed payments for services

• Guaranteed payments for capital

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 4a of the K screen. For more information about data entry of the SA window, see Drake Tax - 1065 - Partner Special Allocations.

Notes

Partner health insurance premiums paid by the partnership may also be included in the calculation of line 10. To avoid EF 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 Drake Tax - 1065: Entering Payments for Partner Health Insurance.

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 or loss coming in to the partnership from another partnership).

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