K-1 box 13 code "R" amount?

[winterescape]

On my partnership K-1, In prior years both my profit share (employer contributions) and my employee contributions were summed together and reported in box 13 with code "R",  This year only the employer portion is reported in box 13 with code "R", my employee contributions are reported in box box 20 with code "AH", is this correct?  How does TT expect it to be reported to properly deduct it from my self employed income?

[dmertz · Accepted solution]

Assuming that these contributions are to the partnership's retirement plan and that is a type of plan such as a 401(k) that accepts elective deferrals, the code R entries in box 13 of the past year's Schedule's K-1 were done correctly and this year's was not.  The code R entry in box 13 should be the total of both employer and employee contributions to the partnership's retirement plan.  The only reason I can see to report something retirement account related in box 20 with code AH would be if deposits were made on your behalf for your convenience to a regular personal traditional or Roth IRA, in which case the code AH entry is informational only and the corresponding contributions would be reported on your tax return as regular personal contributions, not contributions to a retirement plan of the partnership.

I suggest contacting the preparer of the Schedule K-1 to obtain a correction.

[winterescape]

Your assumption is correct. This is our partnership 401(k), I do not have a Roth, all contributions were to our Partnership 401k.

[john-ct]

You don't say if your plan is a SEP-IRA or other.  Your contribution may already have been deducted when computing net earnings.  See Chapter 4, page 15 of IRS publication 560.  You can access it in TTax under Help/IRS publications.

[mfbruno6]

Hello .... could you tell me where in either the form instructions or in the IRC this is stated?  Thank you

[dmertz]

Regarding deductible contributions, the instructions for Box 13 - other Deductions code R say:

Code R. Pensions and IRAs. Payments made on your behalf to an IRA, a qualified plan, a simplified employee pension (SEP), or a SIMPLE IRA plan. See the Schedule 1 (Form 1040) instructions for line 20 to figure your IRA deduction. Enter payments made to a qualified plan, SEP, or SIMPLE IRA plan on Schedule 1 (Form 1040), line 16. If the payments to a qualified plan were to a defined benefit plan, the partnership should give you a statement showing the amount of the benefit accrued for the current tax year.

Both employee elective deferrals and employer contributions to the partnership's 401(k) plan are payments made on your behalf and are to be deducted on the your individual tax return, so they need to be shown on the Schedule K-1 (Form 1065) as a pass-through deduction (in box 13 with code R).  The only reason that a contribution made by the partner to the 401(k) plan would not be included in box 13 with code R is if the contribution was an after-tax (and therefore nondeductible) contribution made by the partner, and in such case it would make sense to show this contribution with code AH in box 20.

[kata123]

Hi:

I have a question on K-1 Line 13 Code R. My K-1 for Line 13 Code R shows contribution to Keogh on a pretax basis, but TT doesn't give me the option of choosing Defined Contribution. TT has the options of only Money Purchase, Defined Benefit, and Profit Sharing to choose from. Summary Plan Description of the employer defines Keogh as Defined Contribution, and the money is taken out from my paycheck. Also there is nothing in TT to report on AfterTax 401k plan contribution.

Thanks.

[jjr37]

For this purpose, I believe that defined contribution and money purchase are the same.  

[kata123]

Hi:

I have a question on Qualified Business Income Deduction Info worksheet, Section D2 for partnership. Qualified Business Income is higher than Self Employed earnings from QBI by about $150. This $150 is income from outside ventures by partnership (not related to self-employment). This change reduced the deduction for 1/2 of Self Employment Tax (that is ok), but TT also adjusted my Self Employment retirement deduction, contributed as pretax in Keogh and 401k plan (line 5f).

Question: (1) why was pretax contribution adjusted that had nothing to do with partnership's other venture? and (2) what method was used to calculate that reduction in SE retirement contributions?

Thanks.

[DaveF1006]

To clarify, what was the nature of this income from the outside ventures?

@kata123