Schedule SE - Section 179 and Line 2



Why is the amount on line 12 of the K1P screen not adjusting the Schedule SE, line 2 amount?

 

Per IRS guidelines, the Section 179 deduction claimed on line 12 only affects the amount on Schedule SE, line 2 (SE earnings) when the partner is a general partner:

"If you are a general partner, reduce this amount before entering it on Schedule SE (Form 1040 or 1040-SR) by any section 179 expense deduction claimed, unreimbursed partnership expenses claimed, and depletion claimed on oil and gas properties. Do not reduce net earnings from self-employment by any separately stated deduction for health insurance expenses."

If the partner is a general partner, check the box General partner on the K1P (Partnership K-1) screen and line 2 will be adjusted by the 179 expense deduction. As indicated above, other amounts may also adjust this figure -- a statement will appear in view to explain the total flowing to line 2.

Note: Only some partners are subject to SE tax, see Related Links below for details.