If you are part of a K-1 partnership, any income the partnership receives is the income of all of the partners split based on their percentage of ownership. As a partner, you are not "on a payroll" and will not receive a W-2. If you are guaranteed a $1200 a month payment this would be reported on line 4 of your K-1 and deducted from the amount available to other partners. If this payment is not guaranteed then this is nothing more than you receiving the money that you will be taxed on anyway.
Any money you withdraw from the business checking is not going to affect your taxable income, as all income and expenses are already flowing through to you on your K-1.
For example, say the business earned $100,000 for the year after expenses, there are 2 partners and each owns 50%. The business itself will file a 1065 which is simply an informational return reporting the income and expenses, but the business will not pay taxes on any of the money earned.
Each partner will then receive a K-1 showing that you received $50,000 whether or not it is sitting in the business bank account or you actually took the money and used it. Each of you will include the $50,000 in your personal tax returns. As far as the IRS is concerned you received it (even if you didn't) since you are a flow-through entity which means whether you use it for your personal expenses or not, you are paying taxes on it the exact same way.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
