| FAQ 184: Budget--Enter compensation for partners (K-1) |
I am working on a partnership plan and would like to use the Budget Routine to calculate the owners' compensation. We have three owners who have all made in excess of $300,000. Do I run the routine for each of the owners, or do I add together all of their compensation and put it in the "Budget Amount" field?
You have 2 choices:
1) Add up all the K-1 earnings for the 3 owners and enter this amount in the Budget Amount box. The budget routine will then split this total dollar amount using the "Income Allocation %" entered for each partner.
2) In the Budget setup screen, check "Input income share" in the Income Allocation box. You will then be prompted to enter the K-1 dollar amount for each partner separately.
If you do not see these options on the screen, review the plan specs on the Plan Identification (ID) screen. The Status field should be coded as "N-Not Incorporated" or "P-Partnership". You should then see these options when you select Calculations/Budget Routines.