My husband and I have an LLC that had rental properties and we sold our last property in 2022 as an installment sale. I used turbo tax to do the tax return for the LLC and the K-1 shows the interest income as ordinary business income, which I believe is correct. However, it also shows it as self-employment earnings which is causing us to pay self-employment tax. My understanding is that interest income is not subject to self-employment tax. (I found this in my search - You also don't pay self-employment tax on income from capital gains, interest, dividends, and other income that is not considered “earned” income.). Is there a way I can go back and alter my K-1 so the interest is not shown as self-employment earnings? Thanks in advance for helping!
