Partnership K-1 Tax Calculator β Schedule K-1 Income 2026
Calculate federal tax on partnership K-1 income including self-employment tax on ordinary income and guaranteed payments, passive rental income, capital gains, and Section 179 deductions.
K-1 Income Items
$
Subject to SE tax for general partners $
Always subject to SE tax $
Passive income β no SE tax $
Taxed at preferential LTCG rates $
Reduces ordinary income (limited to basis) %
Your % share of the partnership $
Spouse income or other wages Examples:
$0
Total Federal Tax
$0
Self-Employment Tax
$0
Federal Income Tax
0%
Effective Tax Rate
K-1 Tax Calculation Breakdown
| Item | Amount | SE Tax | Income Tax |
|---|
How Partnership K-1 Tax Works
Partnership income passes through to partners on Schedule K-1. Each item retains its character (ordinary, capital, passive) on your personal return. General partners owe SE tax on active income; limited partners generally do not.
Formula
SE Income = Ordinary Income + Guaranteed Payments (for general partners)
SE Tax = SE Income Γ 92.35% Γ 15.3% (SS capped at $184,500) + excess Γ 2.9%
SE Deduction = 50% of SE tax (reduces AGI)
AGI = Ordinary + GP + Rental + Other β Section 179 β SE deduction
Income Tax = Federal brackets on (AGI β standard deduction)
LTCG taxed at 0% / 15% / 20% rates on net taxable income
SE Tax = SE Income Γ 92.35% Γ 15.3% (SS capped at $184,500) + excess Γ 2.9%
SE Deduction = 50% of SE tax (reduces AGI)
AGI = Ordinary + GP + Rental + Other β Section 179 β SE deduction
Income Tax = Federal brackets on (AGI β standard deduction)
LTCG taxed at 0% / 15% / 20% rates on net taxable income
Example
$80K ordinary + $25K guaranteed payments, general partner, single:
SE income = $80,000 + $25,000 = $105,000
SE tax = $105,000 Γ 92.35% Γ 15.3% = $14,827
SE deduction = $14,827 / 2 = $7,414
AGI = $105,000 β $7,414 = $97,586
Income tax β $15,788 (22% bracket)
Total = $14,827 + $15,788 = $30,615
SE income = $80,000 + $25,000 = $105,000
SE tax = $105,000 Γ 92.35% Γ 15.3% = $14,827
SE deduction = $14,827 / 2 = $7,414
AGI = $105,000 β $7,414 = $97,586
Income tax β $15,788 (22% bracket)
Total = $14,827 + $15,788 = $30,615
Extended
Partnership vs S-Corp Tax Comparison
Compare your SE tax burden through a partnership vs the same income through an S-Corp structure
Partnership vs S-Corp SE Tax Comparison
Compare the SE tax burden if the same net income came through a partnership vs an S-Corp with a reasonable salary.
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IRS guideline: 40β60% of net income | Item | Partnership (General) | S-Corp |
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Frequently Asked Questions
What is a Schedule K-1 and who receives one?
A Schedule K-1 is a tax form issued by partnerships, S corporations, trusts, and estates to each owner, partner, or beneficiary. It shows each person's share of the entity's income, deductions, credits, and other tax items. Partners in a general or limited partnership receive a K-1 from the partnership each year. The K-1 items flow through to your personal Form 1040 β the partnership itself pays no income tax.
What is self-employment tax on partnership K-1 income?
General partners must pay self-employment (SE) tax on their share of ordinary business income and any guaranteed payments. SE tax is 15.3% on 92.35% of net SE income (up to the SS wage base of $184,500 in 2026, plus 2.9% Medicare above that). Limited partners generally do not owe SE tax on their distributive share of income β only on guaranteed payments. The SE tax calculation on K-1 income is one of the most complex aspects of partnership taxation.
What are guaranteed payments from a partnership?
Guaranteed payments are amounts paid to a partner for services or capital use, regardless of whether the partnership has income. They are similar to a salary in economic terms. Guaranteed payments are: (1) deductible to the partnership, (2) included in the partner's ordinary income, (3) subject to self-employment tax, and (4) reported separately on K-1 Box 4. They are taxed differently from a partner's distributive share of profits, though both are taxed as ordinary income.
How does the partnership basis limitation affect deducting losses?
A partner can only deduct partnership losses up to their tax basis in the partnership. Tax basis includes: initial investment, additional capital contributions, share of partnership debt, and allocated income, minus distributions and allocated losses. If a loss exceeds basis, it is suspended and carried forward until the partner regains sufficient basis. This is separate from the at-risk rules and passive activity rules, which impose additional limitations.
How does partnership taxation compare to S-Corp taxation for SE tax savings?
Both partnerships and S corporations allow income to pass through to owners without corporate-level tax. The key difference is SE tax treatment. In an S-Corp, only the owner-employee's "reasonable salary" is subject to FICA (15.3%), while distributions are not. In a general partnership, the full share of ordinary income (not just a salary) is subject to SE tax. This makes S-Corps generally more tax-efficient for active owner-operators with significant net income.