Where to Enter Guaranteed Payments in Drake Tax
On the DED screen, line 10, which has two fields: guaranteed payments for services and guaranteed payments for capital. An entry in either allocates the payments to partners by the percentage on each partner K1 screen. For a rental activity use the 8825 screen, line 15. To allocate differently, use the SA window on line 4a of the K screen.
- Data entry
- Screen DED
- Line 10, guaranteed payments
| Trial balance account | Drake Tax screen and field | Lands on |
|---|---|---|
| Guaranteed payments for services | Screen DED line 10, first field | Page 1 line 10 and K-1 line 4a |
| Guaranteed payments for capital | Screen DED line 10, second field | K-1 line 4b |
| Rental guaranteed payments | Screen 8825, line 15 | Form 8825 |
| Partner health insurance | Included in the line 10 calculation | Guaranteed payments, and the partner 1040 deduction |
| Allocation to one partner | The SA window on line 4a of the K screen | That partner K-1 line 4 |
| Partner draws | Screen K line 19a. Not guaranteed payments | Schedule K line 19a and item L |
| Missing partner insurance entries | EF Message 1011. Check each partner K1 screen | Blocks e-file |
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Try it freeWhere to Enter Guaranteed Payments in Drake Tax on a trial balance
| Acct # | Account | Debit | Credit |
|---|---|---|---|
| 1000 | Cash | 42,800.00 | |
| 1200 | Accounts receivable | 68,500.00 | |
| 1300 | Inventory | 55,000.00 | |
| 1500 | Equipment | 145,000.00 | |
| 1510 | Accumulated depreciation | 47,500.00 | |
| 2000 | Accounts payable | 28,400.00 | |
| 2100 | Accrued expenses | 9,200.00 | |
| 2400 | Notes payable | 92,000.00 | |
| 2450 | Due to shareholder | 15,000.00 | |
| 3000 | Common stock | 10,000.00 | |
| 3900 | Retained earnings | 86,300.00 | |
| 3950 | Shareholder distributions | 52,000.00 | |
| 4000 | Gross receipts | 612,000.00 | |
| 5000 | Cost of goods sold | 318,000.00 | |
| 6000 | Salaries and wages | 88,000.00 | |
| 6050 | Officer compensation (the account this page is about) | 72,000.00 | |
| 6300 | Depreciation expense | 21,500.00 | |
| 6900 | Other operating expenses | 37,600.00 | |
| Total | 900,400.00 | 900,400.00 |
Example journal entries
| Account | Debit | Credit |
|---|---|---|
| Guaranteed payments to partners | 90,000.00 | |
| Cash | 90,000.00 |
| Account | Debit | Credit |
|---|---|---|
| Partner A draws | 32,000.00 | |
| Cash | 32,000.00 |
Line 10, with two fields that mean different things
Guaranteed payments are payments made to partners without regard to partnership income, which is why Drake describes them as often being a form of salary for working partners. They may be subject to self employment tax.
The DED screen line 10 splits them: payments for services, and payments for capital. The split matters because they report on different lines of the K-1, and because a payment for the use of capital is not the same thing as compensation for work.
Guaranteed payments attributable to a rental activity go on the 8825 screen, line 15, instead.
Allocation follows the K1 percentages by default
An entry on either field allocates the payments to each partner according to the percentage entered on that partner's K1 screen.
That default is usually wrong, because most guaranteed payments go to one partner. A $90,000 payment to the managing partner spread across three partners by percentage produces three K-1s that each misstate self employment income.
The fix is the SA window, reached from line 4a of the K screen.
Partner health insurance rides along
Partner health insurance premiums paid by the partnership may be included in the line 10 calculation. Drake warns that to avoid EF Message 1011, the entries on each partner's K1 screen have to be verified for every partner receiving insurance.
The treatment is the same idea as the S corporation version: the premium is a guaranteed payment, deductible by the partnership, included in the partner's income, and then deducted by the partner personally. Leaving it in insurance expense understates guaranteed payments and costs the partner the deduction.
Guaranteed payment or draw
This is the decision that changes taxable income, and the trial balance rarely answers it. One account holds everything paid to partners during the year.
A payment for work performed or for the use of capital is a guaranteed payment: deductible, on line 4 of the K-1, self employment income. A withdrawal of the partner's own capital is a draw: not deductible, reported in item L. Getting it wrong moves money between a deduction and an equity account, so it belongs in front of the client.
Tax return treatment
| Form | Line |
|---|---|
| Form 1065 | Page 1 line 10, Schedule K line 4, and line 4 of each K-1 |
| Form 8825 | Line 15 for guaranteed payments attributable to rental activity |
Common questions
Where do I enter guaranteed payments in Drake Tax?
On the DED screen, line 10, which has separate fields for guaranteed payments for services and for capital. Guaranteed payments relating to a rental activity go on the 8825 screen, line 15.
How do I allocate a guaranteed payment to one partner?
Through the SA window on line 4a of the K screen. By default Drake allocates the payments by the percentage on each partner K1 screen, which misstates the K-1s when the payment actually went to one partner.
How is partner health insurance handled?
It may be included in the line 10 guaranteed payments calculation. Drake warns to verify the entries on each partner K1 screen for every partner receiving insurance, to avoid EF Message 1011. The partner then deducts the premium on their own return.
Is a partner draw a guaranteed payment?
No. A guaranteed payment compensates a partner for services or capital and is deductible by the partnership. A draw is a withdrawal of capital: not deductible, reported in item L of the K-1 rather than line 4.
Related answers
Go deeper
This page is the short answer. These articles work through the same ground in detail.
Last reviewed October 18, 2026.