On the off chance there's a tax break I'm missing...
Partner's instructions say "...the deduction available under section 199 is limited to 50% of the W-2 wages allocated to you". My line "13T5 - Employer's W-2 wages" is snake eyes (zeros) all across the page. Do I understand right - that there is nothing I can do with those other 13T deductions this year? How about in some future year - am I ever going to be able to claim them?
Arbtrdr is right, but let me give an alternate view.
Entering 13T numbers can maybe decrease your taxes, but will not
increase your taxes over entering no line 13T numbers into
TurboTax. If you do enter some line 13T numbers from more than one
K-1, you need to enter them all since they can interact. I suggest
that entering no line 13T numbers may cost a small amount to some
small investors. For most, in my experience, entering line 13T
numbers will not affect taxes.
If the Form W-2 Wages Allocable to DPGR (which 13T item that is can
vary) for all of your K-1s is zero, then entering 13T items will not
reduce your taxes. If the totals for that on your K-1s is small, then
the tax savings may not be enough to make taking the time to understand
and enter the 13T numbers may not be worth your effort. I am confident that arbtrdr
can enter these numbers quickly and efficiently, but it is not so quick and easy for
the average person.
Regarding capital account, I rely on the partnership to track that. Is there info in 13T
that will likely allow me to email the partner at some point to adjust the capital account up?
Rud - You view is not an alternate one. Entering the 13T numbers requires no understanding except to read the titles and punch them in. That means only a bit of time. I have usually gotten no credits from my 13T entries, but in five years (about 1996, 1998, 2007, 2008, 2009) I got something on the order of $500-$1K in credits by entering them.
The only place I disagree is entering them for the first time is a bit challenging, but doing the exact same thing over and over should be easy for the second and future efforts. Sort of the same as entering the other K-1data. OK?
As to the partnership capital account. Their numbers are likely to NEVER match your numbers exactly. That is because the MLPs all use an average purchase cost basis using the purchases for an entire month and not each persons purchase price. They will gladly correct your numbers with a call or email to K-1 support and then future year K-1s numbers will be exactly correct. To my knowledge the 13T numbers have nothing to do with the capital account total. The 13T numbers involve credits for oil/NG depletion credits/deductions and credits for wages.
Rud - As to the capital account number. The 13T number does not effect the capital account. The one thing I can guarantee is that the starting capital account basis will NOT agree with what you paid. All the MLPs use an average price for the preceding month for the price per unit paid. Thus you might well find you paid more. If so call of email K-1 tax support and they can and will easily correct it
I would suggest that it is not really necessary to 'understand' the 13T numbers, just enter them.
There are up to 8 (?) 13 T numbers and TT provides boxes to enter all of them on any K-1 where you indicate a 13T code. So just enter whatever 13T numbers you have on all your K-1s and let TT figure out whether you get a deduction or not. Once your K-1s are entered, if you are interested you can look at your form 8903 to see where the numbers went on the form and whether it did you any good. Some years you get no benefit, other years you may. This year I am getting almost $1000 federal deduction for 13T. Last year I didn't get one. Luck of the draw but if ya wanna enter to win, you have to input your numbers (and as you say from all your K-1s).
Perhaps the only confusing thing at first is that some K-1s are not very consistent on how they label these 13T codes. For example in place of saying expenses not directly allocable, you sometimes see wording like interest expenses. But there are only a limited number of boxes, so it's not that hard to figure out which number goes in which box.
So while it may not be 'quick and easy' to understand the numbers, seems to me pretty quick and easy just to enter them. After all, TT gives you a box for each. The understanding part is optional and can be done at leisure by perusing form 8903 once you completed your return.
You can in certain circumstances take a 50% deduction for amounts on line 13T5. As to the other 13T numbers you need to enter all of them to determine if you are eligible for a deduction or credit. This year the EPD numbers add up to negative and they need to be positive for a credit. I have gotten a credit from EPD once.
Big suggestion - just enter all the numbers. It takes less time than either asking here or reading the instructions. That way you get every possible credit and have all of the numbers in your computer on your capital account to figure any takes due if you hold long enough to get your capital account to zero or if you sell.
I am getting approx $1000 federal deduction from 13T this year across all my K-1s.
Last year I was going to get a deduction until the final K-1 I entered which messed up the ratios and eliminated my deduction. But this year I have entered all K-1s and getting a $1k break from the domestic production activities deduction.