According to the IRS, “You can deduct unreimbursed ordinary and necessary partnership expenses you paid on behalf of the partnership on Schedule E if you were required to pay these expenses under the partnership agreement.” This deduction is reported on line 28 of Schedule E and can reduce your income subject to self-employment tax.
How do I report this within the program?
To make this election within the program, please follow the path below:
- Federal
- Income (select my forms)
- Less Common Income
- K-1 Earnings
- Schedule K-1 Form 1065
- Add a Schedule K-1 Form 1065
- Complete the "Unreimbursed Partner Expenses Related to Self-Employment Earnings" section to report your expenses.
You may read more about this deduction, here.