K-1 and how to calculate Earned Income

[Guest Born2Run]

Individual is 90% partner in LLC

Plan sponsored by LLC is 401k Plan with dferrals and match only.

K-1 for this partner shows box 4 guaranteed pmts of $240,000 and box 14A self employment earnings of +$240,000.

For purposes of my plan compensation calculation, i believe i add box 4 and 14A together. It just seems odd that they are identical and have been for many years. (As an asided, prior TPA used box 14A for plan comp).

Thanks.

[Laura Harrington]

Individual is 90% partner in LLC

Plan sponsored by LLC is 401k Plan with dferrals and match only.

K-1 for this partner shows box 4 guaranteed pmts of $240,000 and box 14A self employment earnings of +$240,000.

For purposes of my plan compensation calculation, i believe i add box 4 and 14A together. It just seems odd that they are identical and have been for many years. (As an asided, prior TPA used box 14A for plan comp).

Thanks.

No, you do not add box 4 to 14A to determine net earnings from self-employment. If you follow the instructions for completing the Form 1065, and the K-1 attachment you will see that the guaranteed payment is already included in the number listed on line 14, Code A.

http://www.irs.gov/pub/irs-pdf/i1065.pdf

[BG5150]

Do you remove the 179 from 14A deduction though?