To enter the housing and allowance you will go through the Schedule C if you did not receive a W-2. Follow these steps to enter the housing and allowance:
- Select Business
- Click Add a business
- Enter the 813000 code (business code for housing allowance)
- Select I need to pay self-employment tax on this income.
- Enter your housing allowance or parsonage
- Continue interview questions to report ministry income and expenses
Housing allowance is excludable from gross income for federal and state income tax purposes but not for self-employment tax purposes. When a portion of compensation is received as housing allowance, federal and state taxes are directly reduced.
If your housing expenses does not exceed the housing allowance, you do not have to report it. However, if you have excess housing allowance that is taxable as Self Employment income on Schedule C as stated above.
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