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Returning Member
posted Apr 9, 2021 11:02:05 AM

Line 14 C on K1 Form question

My husband is a general partner for a small LLC business.  The business paid out distributions to all of the partners dependent on their percentage of ownership which produces the K1 form.  We use Turbotax for both the business and personal.  On my husband's personal K1 form produced by the Turbotax software, there is an amount in 14A and an amount in 14C.  I don't believe we need to include 14C for our personal taxes, but I am not sure.  14A seems to show the amount distributed to him after deductions which makes sense that he would pay taxes on, but 14C appears to be calculating the business amount.  Do we need to include 14C on our personal taxes?  When we input 14C on the turbotax program it seems to double the amount of taxes which doesn't seem correct.  Can you please help?  Thanks much!

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4 Replies
Expert Alumni
Apr 9, 2021 11:24:20 AM

Enter both amounts.  The amounts in Box 14, with Codes A and C, just describe the type of income reported in Box 1 of the partnership K-1.  They are not added to income.  

  • Code A indicates that the income is considered self-employment and Schedule SE has to be generated.
  • Code C is used to trigger the nonfarm optional method on Schedule SE (Form 1040).

Returning Member
Apr 9, 2021 12:15:20 PM

Thanks so much Irene!  I am not very familiar with the nonfarm optional method.  Can you give me a bit more information on that piece.  Thanks much!  It may help to know that my husband's business is a flooring business.

Level 3
Jan 23, 2024 8:20:50 PM

The K-1s I just did for a business are showing the correct amount of taxable income in 14a and some very incorrect amount in 14c.  What should I tell the customer to use on their personal return?  They are going to ask why there is an almost double amount of taxable income in 14c.  I read that you answered it has to do with nonfarm income.... what?  These are two partners in an LLC and we should be treating their profits as self employed income.  I cannot even reconcile the amount showing in 14c.

Please answer quickly if you can

Thanks!

Expert Alumni
Jan 24, 2024 6:58:23 AM

You will need to trace the income shown on the Schedule K-1 Worksheet to the source income on all schedules in the return. Line 14c flows from Schedule SE Part II.

 

Please be aware that the TurboTax license prohibits using the software to prepare returns for unrelated parties (ie: customers). If you have a tax preparation business, you need to use commercial software to prepare client returns.