If you report the K-1 on your personal return, you don't need to include the LLC, it is a disregarded entity.
Generally, a partner may not deduct the expenses of the partnership on his or her individual income tax return, even if the expenses were incurred by the partner in furtherance of partnership business.
However, an exception applies when there is an agreement among partners, or a routine practice equal to an agreement, that requires a partner to use his or her own funds to pay a partnership expense.
Here's how to report unreimbursed partnership expenses in TurboTax.
- When entering K-1 information, you will eventually come to a screen titled ‘describe your partnership’.
- Check the box that asks if you are 'required to pay supplemental business expenses'.
- The next screen is 'Unreimbursed Partnership Expenses'. Check the 'Yes' box.
- You can then enter your unreimbursed partnership expenses.
To deduct home office expenses as an unreimbursed partnership expense, see IRS Publication 587, Business Use of Your Home, Deducting unreimbursed partnership expenses.
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