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Level 1
posted Mar 9, 2020 8:25:14 AM

Is there a place to enter guaranteed payments on a Schedule C?

My husband is a Schedule C business owner and paid himself guaranteed payments last year.  Is there a place on the Schedule C where I'm supposed to enter in these payments?  If so, where?  

0 12 3730
12 Replies
Expert Alumni
Mar 9, 2020 9:55:16 AM

Were the payments reported on a schedule k-1?

 

Level 1
Mar 9, 2020 10:06:24 AM

No he’s a single member disregarded entity 

Expert Alumni
Mar 9, 2020 10:14:02 AM

There is no such thing as Guaranteed Payments for a Schedule C.  You are a sole proprietor and are paying self-employment tax on all your profit.  Wages paid to an owner is not an expense, it is profit. 

Returning Member
Sep 6, 2023 2:02:16 PM

Sorry for waking up this sleepy post 😄

 

My LLC paid me Money, but the money was borrowed from the LLC in order to be able to pay the owner.

How do I enter this guaranteed payment on the tax return?

Level 15
Sep 10, 2023 2:30:14 PM

How do I enter this guaranteed payment on the tax return?

 

As already mentioned a Sch C cannot/does not have guaranteed payments so they are not entered anywhere on the Sch C and neither are the loans from the owner to the Sole Prop.  If you don't understand this concept I highly recommend you read up on the rules and/or seek local professional help. 

Returning Member
Sep 11, 2023 12:13:07 PM

Can the sole prop. give a 1099 for the the owner?

Level 15
Sep 11, 2023 2:36:07 PM

In a sole proprietorship,  the "sole proprietor" and the "owner" would be the same person.   You do not issue a 1099 to yourself.    What are you trying to accomplish?

Returning Member
Sep 11, 2023 2:51:40 PM

@xmasbaby0 

I had a business that had a loss, If I'm gonna claim all expenses I'll be left with no income, so I'll not get any child tax credit,

But if I have income from another business (which is my business giving me a 1099) I'll be able to get a refund 

Level 15
Sep 11, 2023 2:58:18 PM

I think you need to take the advice offered to you earlier by @Critter-3  and seek professional tax help.

Level 15
Sep 11, 2023 3:02:39 PM

Sole proprietors cannot take a withdrawal or salary and include it as an expense on their tax return. As a sole proprietor, you are not an employee of the business. You don't pay yourself or enter a salary or withdrawal for yourself. All the business income and expenses are your personal income and expenses in the first place. You just fill out a Schedule C. The net profit or loss is your income.  If you have a net profit of $400 or more on schedule C you will pay SE self employment tax on it in addition to your regular income tax. It's all included on your personal 1040 form.  

See Schedule C instructions page C-10 for line 26,  right above line 30, Do not include….amounts paid to yourself

http://www.irs.gov/pub/irs-pdf/i1040sc.pdf

 

And if you add another Schedule C for the 1099NEC income it will be netted with the loss on the first Schedule C so you would probably still have an overall loss.

 

 

 

Returning Member
Sep 11, 2023 3:21:15 PM

So in that case, I'll not be getting any refund?

Level 15
Sep 11, 2023 3:23:22 PM

Sadly---if you cannot show income earned from working, then you will not get refundable credits such as earned income credit or the refundable additional child tax credit; and if your business shows a loss, you are not eligible for the childcare credit.