Entering and allocating guaranteed payments in Lacerte

This article will assist you with entering and allocating guaranteed payments in the Partnership module of Lacerte.

Follow these steps to enter and allocate guaranteed payments in the program:

1. Go to Screen 13, Deductions.
2. Locate the Deductions section.
3. Enter the total amount for all partners in the Trade or Business subsection.
4. To enter capitalized guaranteed payments:
   • Go to Screen 13, Deductions. Locate the Guaranteed Payments (including partner health insurance) subsection. Enter the amount in, Capitalized.

4. Go to Screen 29, Special Allocations.
5. Click on the Income folder from the left navigation panel.
6. Select Guaranteed Payments (Scr. 13).
7. Enter the amount or percentage for each partner.

Once the allocation is complete, verify the calculation and allocations on the Schedule K-1, line 4.

How to enter Guaranteed Payments Not Subject to Self-Employment Tax in the Partnership Module

Lacerte defaults Guaranteed Payments as derived from a trade or business as defined in section 1402(c). Per the form instructions, guaranteed payments from a trade or business should be included in Self-employment income on line 14a.

However, if the partnership's guaranteed payments are not derived from a trade or business as defined in section 1402(c) and you would like to remove the amount from line 14a:

1. Go to Screen 22, Other Schedule K Items.
2. Scroll down to the Self-Employment section.
3. Enter an amount or a -1 (if none) in, Net earnings from self-employment [O].