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Level 1

I am clergy and my W-2 has housing allowance incld. Nothing in Box 14. My Long Schedule SE shows that my housing allowance has been added to my wages. Why?

My 1040 indicates that my Housing allowance (Line 21) is negative, as indicated in another post to bring my Wages down for federal taxation.  This doesn't seem to be the case for Self-employment since it looks like my housing allowance has been added to my wages.   Can you advise me on a way for my SE worksheet to reflect my actual wages?

thank you.

1 Reply
Level 7

I am clergy and my W-2 has housing allowance incld. Nothing in Box 14. My Long Schedule SE shows that my housing allowance has been added to my wages. Why?

As a member of the clergy and receiving clergy pay including housing allowance portion, the benefit of this designation is that it is not taxable for personal income tax, however it is taxable for self employment tax. It should correctly be adding this amount to the wages portion. If the housing allowance is already reported in box 1, then you should not enter it again where it asks for the housing allowance.  This could be doubling the figure if the W2 incorrectly includes the housing allowance portion in box 1, Gross Wages.

If, as you say the wages in box 1 of the W2 include the housing allowance (which would not be the correct way to report it), then you should use the housing allowance portion of wages as a negative figure on line 7 as opposed to line 21, by completing the steps below.  This has an impact on other items on the tax return such as earned income tax credit, if applicable.

  1. Sign into your TurboTax Account 
  2. Select Income and scroll to Less Common Income 
  3. Select  Miscellaneous Income  > Other income not already reported on a Form W-2 or Form 1099
  4. Continue to the screen where you can enter the amount and use the negative/minus sign in front of the number.
  5. Click the images to enlarge and view for assistance.

You should delete the entry you made for line 21 of your tax return.