The income for my sole-proprietorship comes almost exclusively from a guaranteed payment on a K-1. I don't see a place to put the K-1 under business income. Do I just put it in personal income? I just want to make sure I do this right. Thanks!
You would enter the guaranteed payment in the K-1 section of the TurboTax program.
See https://www.irs.gov/publications/p541#en_US_202203_publink1000104261
If you are receiving a guaranteed payment from a partnership or multi-member LLC (which defaults to partnership treatment), then you are a partner in the partnership or member of the LLC. The payment is also subject to self-employment tax.
You would enter the guaranteed payment in the K-1 section of the TurboTax program.
See https://www.irs.gov/publications/p541#en_US_202203_publink1000104261
If you are receiving a guaranteed payment from a partnership or multi-member LLC (which defaults to partnership treatment), then you are a partner in the partnership or member of the LLC. The payment is also subject to self-employment tax.
Thank you for your reply. So I guess the question becomes what we put in the business income section, since the business income comes primarily from the K-1 guaranteed payment?
If you are receiving a K-1 for services performed for the partnership, then you are a partner for the purposes of the income reported on the K-1, not a sole proprietor (although you would be considered to be self-employed).
If there is some other sort of arrangement between you and the partnership (i.e., you are not a partner, but are an independent contractor who performs services for the partnership), then you should not be receiving a K-1 as a tax reporting statement (most likely it would be a 1099-NEC). If that is the case, then you need to speak with the party responsible for preparing the tax reporting statements for the partnership.