| If
a partner incurs out-of-pocket expenses in connection with providing
services to a partnership, those expenses may be deductible on the partner’s
individual tax return. To be deductible, the partnership agreement must
state in writing that the partner pay the expenses. A partner’s
out-of-pocket expenses are deducted on Schedule E (Form 1040), Part II,
column (i). These expenses also reduce self-employment income on Schedule
SE. The partnership may reimburse the partner for business expenses.
However, if the partner has the right to be reimbursed, but fails to
obtain reimbursement, the partner is not entitled to a deduction. |
