Where to deduct unreimbursed expenses for a multi-partner LLC?
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New Member

Where to deduct unreimbursed expenses for a multi-partner LLC?

I am in a 3-partner LLC, billing consulting hours. We are filing a 1065 with K-1's to each partner. I have expenses I incurred for the LLC that were not reimbursed by the LLC. How to I obtain a deduction for these expenses? Do I account for them on the LLC's 1065, Schedule K, or my own 1040 Schedule C?
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New Member

Where to deduct unreimbursed expenses for a multi-partner LLC?

Under the general rule, a partner is not allowed to deduct partnership expenses on his or her own individual tax return. However, an exception applies when there is a provision in the partnership agreement requiring the partner to pay the expenses, or if payment of the expenses is a routine partnership practice tantamount to an agreement.

Allowable expenses are deducted on Part II, Schedule E (Form 1040). Report allowable unreimbursed partnership expenses as a separate item from partnership income on line 28, Schedule E. Enter "UPE" as the name of the line item, then list the amount on (h) of line 28. The expense will be deducted from partnership income and will also reduce net income subject to self-employment tax.

Enter your partnership K-1 information in TurboTax. As you go through the screens entering your information, you will eventually come to a screen entitled "describe your partnership". Be sure to check the box "I am required to pay supplemental business expenses...." You will be prompted to enter your expenses once this is done.
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