My husband is a pastor. I filled out paper Pub 517 worksheets to figure out the allowable deduction for Schedule C expenses, but I can't figure out how to do it in Turbo

[KarenJ · Accepted solution]

Please see the 2019 Ministers' Tax Guide for 2019 Returns.  There are examples of worksheets and tax returns prepared in TurboTax.

https://www.guidestone.org/TaxGuide

Yes, you will need to override Line 28 on Schedule C in the Forms view to reflect the decreased expenses allowable.  TurboTax should let you finish and print your return for mailing.  You need to mail your return anyway in order to attach the worksheets to you return.

In order to decrease your wages on the Sch SE for your business deductions, please enter your business deductions on line 5c of the SE Adj Wks in the Forms mode.

Please see the attached screen shots.

Please let me know if you have additional questions.

[stufordkm]

Hi Karen,

I've done everything except these worksheets. This is the first year that I'm doing taxes myself, so I have the examples from previous years from our tax preparer. I plan to copy it as close as possible. However, is there any chance that Turbo Tax has added these to the 2020 package? (I don't see them.) Have they added an ability to include pages in the electronic tax return? If I have to mail them in, any knowledge of how soon they might be processed? 

Any information you have would be greatly appreciated.

Thank you

[stufordkm]

Also, could you attach those screen shots of what you did?

[AshleyLO]

@stufordkm So that we can best advise you, please clarify exactly what worksheets you are needing assistance with or have questions about.

[stufordkm]

I found and filled out, and was able to put the adjustments in to Turbo Tax for our Clergy Itemized Deductions where I show what percentage of schedule c deducts aren't allowable because of the housing allowance, as well as where to put the corresponding deduct in to the SE. However, I'm not sure how I can attach them to my tax return, as I didn't find them in the program itself. The tax law reads that they must be attached along with the list of the deducts that they are referring to. 

[MarilynG1]

You could Efile your return if you enter the amounts you have calculated for allowed expenses on Schedule C. 

However, you should save your self-prepared worksheets for your records in the event you need to show how you arrived at your amounts. 

Or, you are correct that you can mail in your return with the attached statements.  TurboTax will walk you through doing this in the Filing Instructions that print with your return, along with any required worksheets prepared in TurboTax.

You will see this if you View/Save/Print your return 'with all forms and worksheets'. 

Click this link for detailed info on Ministers and Taxes. 

This link has more info on Reporting Pastor Income. 

[stufordkm]

Hi Marilyn,

Thank you, just as I was getting ready to e-file, I went to the links you sent and read that Turbo Tax also states that you must attach the worksheets and list to the tax return, so I printed everything out and am jumping through hoops to get it mailed stateside. However, is there a way to request that Turbo Tax make a change in their program to allow for these clergy worksheets to be attached? They could either include them as a section, or they could allow an outside attachment of hand-done calculations. I know many people in our situation aren't even aware that they need to do these clergy worksheets, those of us who are aware is because of having tax preparers in the past, and I've read other comments of frustration because they have a hard time making the adjustments. There needs to be a question on the schedule C related to clergy and calculating their unallowed business expenses due to their housing deduction. I hope that I don't have issues, as I had to record a negative number in the list under other deductions in order to subtract out the unallowed business expenses. But, I'm attaching the worksheets with explanation where it shows how it all matches up. 

[AmyC]

I strongly recommend you efile. The IRS is way behind in processing returns. They are just now opening returns mailed last June and paying returns from March a year ago.

If the IRS has a question, they will send you a letter and you can reply with a fax/ letter of worksheets. That seems a lot easier with everything going on.

Having a negative number for the adjustments is not an issue. The IRS is  just wanting you to pay the correct tax on your income. As long as the bottom line shakes out correctly and you have documents to show how you came up with it, the IRS will be reasonable.

You are welcome to mail the return, just understand that papers often get lost in the process. They are all separated from each other for data entry and you may not be ahead of the game in the end.

[stufordkm]

Thank you Amy for letting me know. Of course, that is how I preferred doing it, as it is so complicated from overseas in the middle of a pandemic. I was just worried about getting in trouble, but you both seem confident that maximum I'll be given a chance to provide the worksheets, so I'm good. This is just my first time doing taxes by myself, and while I've been impressed with your program, and thoroughly studied my former tax preparers' work, I'm understandably still a bit nervous. But, you have reassured me, and e-filing is much better for us. 🙂