I am 50% partner in an LLC, I pay for own gas and medical premiums. How do I effectively write that off.

Forum|Forum|6 years ago
April 18, 2020
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I split the LLC with my wife, we both have unreimbursed mileage and medical expenses against the LLC. Is it more efficient to Write mileage off when doing the K-1 as unreimbursed expense, or write it off with each of us doing a Schedule C Sole Proprietorship .

For medical, do we do the same thing, use schedule C Sole Proprietorship ?

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Best answer by AmeliesUncle

@AmeliesUncle I'm having a hard time following the flow of the numbers with that, with the claim it's deductible. With it in box 4 and 14 it's still taxable income to the recipients. If they want to claim the portion of box 4/14 for medical, it's still a SCH A deduction on the 1040. Since there is no SCH C, I don't see how SCH 1 fits into this with the K-1. I can't find "a flow" for anything related to medical (including insurance) from the K-1 to the SCH 1.

Am I still missing something?

The Self Employed Health Insurance deduction also applies to Partners (and >2% shareholders in a S-corporation). It is first added to their Guaranteed Payments (or wages for a S-corporation shareholder). The *IF* the taxpayer qualifies, they can use the Self Employed Health Insurance deduction on Schedule 1.

https://www.irs.gov/publications/p535#en_US_2019_publink[phone number removed]

When entering the K-1, there is a check-box about health insurance (although it is VERY poorly worded). Check that box and the followup questions should do it.

O

Opus 17

Employee

Unless you live in a community property state, it is not legal to file 2 schedule C’s for a multimember LLC, even if the two members are spouses. You must file a separate partnership tax return. Your LLC’s tax return was due March 15, not April 15, and unless they extended the deadline for partnership returns as well, the penalty for late filing is $195 per month per member.

Since you can’t deduct business mileage on a personal tax return in most cases, if you are filing a partnership tax return for a multimember LLC, it will be more beneficial for the LLC to adopt an accountable expense plan and reimburse your legitimate business expenses rather than putting them on your personal tax return.

If you do live in a community property state, you have the option of treating a LLC were the only two members are spouses, as if it was two separate disregarded entity’s, each on a schedule C. You must split the income and expenses exactly 50-50. Again, it will be better to treat your expenses as it reimbursed business expenses under an accountable expense plan, presuming you do the documentation to keep everything straight in case of an audit.

F

fcarboneAuthor

Employee

Thank You,

So my partnership extension was filed by March 15, and I am in NY, not a community property state. After I file Form 1065, and generate K-1'S, which will have my unreimbursed miles, I am still left with medical to write off and it appears I need to file Schedule C to pass the K-1's thru to each of us.

From what I have been reading, we both need to file schedule C's to write off Medical Premiums, unless there is a better way. Is that correct?

A

AmeliesUncle

No, you don't do ANYTHING with a Schedule C. There is a separate section that will ask you to enter your K-1s, and that section will ask you everything, including about any unreimbused expenses and medical insurance.