Can I deduct mileage expenses on K-1 Partnership?

[bush2000]

I invested money in the company that I am working at. So I have a W2 and K-1 (partnership). i usually work at home but travels to the office sometimes. The mileages were never reimbursed. When I am filing K-1 in turbo tax, it asks whether I have unrimbursed mileage expenses from K-1, am I allowed to enter my unreimbursed mileage expenses there? I also incurred some office suppy expenses, can I enter them as unreimbursed business expenses in K-1 too? Thank you!

[AmeliesUncle]

Is Line "G" of the K-1 marked as a "General" Partner or a "Limited" Partner?

[bush2000]

Limited Partner

[DawnC]

In most cases, partners aren't allowed to deduct unreimbursed partnership expenses (UPE) on their personal tax returns.  However, if your partnership agreement requires that you cover certain partnership expenses out-of-pocket, you may be able to deduct ordinary and necessary unreimbursed expenses if they qualify as Section 162 trade or business expenses. This gets reported on Schedule E.

When entering your UPE, don't include expenses that can be itemized on Schedule A, nor passive activity expenses if you are required to file Form 8582.   Where to enter unreimbursed partnership expenses - UPE is entered in the K-1 interview:

1. With your return open, search for K-1 and then click the "jump-to" link in the search results.
2. Proceed through the K-1 path for partnerships and LLCs, answering the questions as you go.
3. When you get to the second Describe the Partnership screen, check the first box ("I am required to pay supplemental business expenses...for which I am not reimbursed").
   • Note: There is another Describe the Partnership screen that comes before this one, but that's not the one you want. You'll want the screen that comes after you've entered info from the boxes on your K-1.
4. Answer Yes on the Unreimbursed Partnership Expenses screen and proceed.

[AmeliesUncle]

As a Limited Partner, in my opinion, no, you can't deduct expenses.  Your ownership in the Partnership is purely investment purposes, and the WORK that you do is on the W-2.  As such, the expenses for your work are not deducted as Unreimbursed Partnership Expense.

Deducting expenses for your W-2 work is no longer deductible on the Federal return.

[superdesi]

The thread below says we can't but this thread says we can.

My partner (S-Corp) is happy with his paid off car he has had for years and years and does not want a new one nor does he want to expense any vehicle's on the business. Therefore I am stuck paying for my vehicle out of my taxed earned income from my k-1.

I also use my home as an office. The company pays for an office he uses which is next to his house but I don't.

To summarize, if we had some sort of partnership agreement, would we be able to deduct the mileage, and home office for 2020 returns on my personal?

I am finding various different answers everywhere.

[AmeliesUncle]

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@superdesi wrote:

The thread below says we can't but this thread says we can.

My partner (S-Corp)

To summarize, if we had some sort of partnership agreement, would we be able to deduct the mileage, and home office for 2020 returns on my personal?

I am finding various different answers everywhere.

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The thread you are posting on is about a Partnership.  The quote you entered is about a S-corporation.  Different entities have different rules.

Partnerships and corporations really are NOT a do-it-yourself type of thing.  You REALLY should be going to a tax professional for those.

[superdesi]

Yes I do have a professional, but was looking for another opinion since he's saying we can't.

[AmeliesUncle]

Partners in a Partnership can (if the Partnership Agreement requires it).  Shareholder/employees in Corporations can't.

But either way setting up an "Accountable Plan" is probably a better idea.

[superdesi]

With an "Accountable Plan" this would be possible I assume?

[AmeliesUncle]

Talk to your tax professional about it.  If they did not already suggest it, you probably want to find a different good tax professional (be sure to go to one that does S-corporations).