I reviewed your PDF, starting on page 106 as you indicated. In this example, the authors of the publication disagree with me that a Deason rule allocation should be made for your allowable expenses on schedule C. In this case, you must make the allocation manually. (TurboTax has never included this calculation. Even if it has been newly included for 2023, you should still make the calculation manually because the pension as housing allowance is not the same as a wage designated as housing allowance. Although a Deason rule allocation may need to be made, the pension is still never subject to SE tax.)
For example, if you determine that you have $100 of business expenses that are 25% allocable to salary, and 75% allocable to housing allowance, then you would just enter $25 as the expense on schedule C. The regulations state that you should also attach a written statement explaining your calculation, which means you can’t e-file, because TurboTax does not allow attachments. You could e-file without attaching the explanation and keep the explanation with your records in case of audit, or you could use try using a different software that allows attachments.
