Where do I enter federal and state tax withheld when using a schedule k1?

[robtstark]

It's my first year getting a K-1, I've entered all income earned but I do not see where in the desktop version I enter the federal and state tax withholdings. Thanks!

[PatriciaV]

Please clarify how the federal and state tax withholding was reported to you. Also, what is the full title on the Schedule K-1?

[robtstark]

I have a Schedule K-1, Form 1065, Partner's Share of Income, Deductions, Credits, etc.

I reviewed the form and do not see my tax withholdings listed, but I know the totals based on paystub summaries. 

[PatriciaV]

If taxes were withheld from the distributions you received from the partnership and were not reported to you on another tax form, enter the amounts from your paystubs under Deductions & Credits >> Other Income Taxes >> Other Income Taxes Paid >> Withholding not already entered on a W-2 or 1099. Continue through the screens until you see boxes for Federal and State withholdings.

However, if you were an employee of the partnership, you should have received Form W-2 to report your total wages and taxes.

[Margli]

What if - I received my Schedule K-1, Form 1065, Partner's Share of Income, Deductions, Credits. The federal tax of this K1 was withheld and reported to me through 1042-S (although I’m a resident alien. They got my information wrong and thought I was a non US / foreign partner). The net income on the 1042-S matches the amount shown on K1. I filed/put in the information of K1 on TurboTax already, should I file 1042-s in the income section as well? I’m concerned that since the income amount is already included in the K1 filing, if I file 1042-S in the “other income” section, won’t the total income amount be double counted? Or since the 1042-S is for getting my federal refund purpose, I could just include it in the Credits and Deductions section — withholding other than W2…? 

[ThomasM125]

You should only enter the K-1 schedule, since you don't want to double report income. You can enter the tax withheld as you describe as taxes withheld other than reported on a W-2 form.

@Margli 

[rona11]

@PatriciaV Thank you very much and this is also the answer I am looking for. There is a small twist with my situation though - My wife and I own a LLC (pass-through entity), which invested in a partnership-A, who withheld state tax from its distributions but not reported in it's K-1 (I can see it from its statements). In this case, can I also report the state tax withholding as you suggested during my Federal/State tax return? I was hoping the tax withheld can somehow be reflected in my LLC's K-1 first, which will then flow through to my federal tax. I do not know if there is a way to do it (I purchased TuroTax Business). Maybe it's not necessary if I can just follow what you suggested here and directly put it in my Federal and State tax. Appreciate your further advise.

[DawnC]

Yes, enter the withholding from the statement as Patricia describes above, @rona11    TurboTax will transfer the amounts to your state return(s).  

[rona11]

@DawnC Appreciate very much for the quick response and confirmation. One thing in my mind was that the state tax withhold was against my LLC's tax-ID (as an investment via my LLC, which is a passing-through entity), and when I report it in my personal return (using my social), I hope they will find a way to reconcile the two tax ID's.  

[PatriciaV]

As a pass-through entity, the LLC is not required to pay state income tax. Tax paid under the LLC's tax id will be credited to the owners of the LLC. Depending on the state, you may need to include the tax payment on the K-1 from the LLC.

When you complete the state income tax interview for your personal return, look for questions under the K-1 topic that relate to tax paid on your behalf by the LLC.

Note that the LLC may need to pay franchise tax to the state, which is not the same thing.

[rona11]

@PatriciaV Thank you for the further advise. While I try to follow the suggestion using TurboTax (Premier on Win and Business on Win), I encountered the following:

1) " ... Depending on the state, you may need to include the tax payment on the K-1 from the LLC."

 I can't figure out how I can include the tax payment info in the K-1 of my LLC generated by TurboTax Business. I went through the interview questions and can't find it. Does it suppose to go to Box 15 (credit)? 

2)  "When you complete the state income tax interview for your personal return, look for questions under the K-1 topic that relate to tax paid on your behalf by the LLC." Again in the Individual return (TurboTax Premier), on the "State Tax" tab (NJ), I went through my LLC K-1 part, and did not find the tax payment related interview questions.

So far I can enter the amount of the state tax paid as you initially suggested during in individual Federal Tax ("other tax .... tax paid not reported in W-2/1099 ..."). But as I mentioned, I am wondering if the tax paid via my pass-through LLC can be entered this way. 

Thank you for any further suggestions.   

[PatriciaV]

For TurboTax Business:

1) You may include the New Jersey income tax withholding as Supplemental Information using Box 13 Code ZZ Line 3 "State income tax withheld."

Using Box 13 Code ZZ will create a note on the NJ Schedule NK-1 that references the federal K-1 supplemental information provide by your investment.

For TurboTax Desktop:

2) When you enter the federal K-1 with Box 13 Code ZZ, you will see a page where you can enter Line 3 (state tax withholding). You don't need to enter this amount anywhere else on your 1040 return.

During the Partnership/K-1 interview for your New Jersey individual return, look for "Schedule NJK-1" and the question about Part III. The top box is for "Share of New Jersey Tax." Enter the amount from the NJK-1 supplemental information here.

[rona11]

@PatriciaV Wow this is so detailed and helpful. This is what I did to add the state tax withheld to Box-13 with code ZZ: I could not find the relevant interview questions. Instead I manually added it to the Form 1065 (TurboTax Forms), as shown in the following:

 I then can see this number shown up on Box-13 with code ZZ. During the Federal Individual return, I can input this number as NJ state tax withheld during the code ZZ interviews. I also saw this number reflected to my NJ-1040NR return.

I think I am able to follow everything you suggested except that I did not generate NJK-1. I used to be NJ resident and moved out two years ago. My LLC does not have any NJ resident partners, with no NJ sourced business income/loss (but I still have other NJ sourced individual income) , so I think I do not need to file NJK-1 anymore (and saved me $50 TurboTax charge for NJ K-1 filing).  Pls let me know if you have a different understanding on this later matter.

I can't thank you enough for your suggestions and help. It saved me a lot of time and worries.