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If your housing allowance is included in your W-2 box 1 taxable wages, then the problem is with your church, not the IRS or Turbotax.

 

A housing allowance must be declared in advance and in writing by the responsible church body (Deacons, board of elders, etc.).  It is not included in your box 1 wages.  Clergy are considered common law employees for most purposes and should receive a W-2, even though they are treated as self-employed for limited purposes.  You should receive a W-2 with your taxable compensation (not including non-taxable housing allowance) in box 1, box 2 is generally empty (unless the church agrees with withhold and remit federal taxes), and boxes 3-6 must be empty.  If you are paying social security and medicare tax in boxes 4-6, this is also a mistake by your church.

 

The housing allowance is not reported on the W-2 at all, or it can be reported in box 14, which is a memo field.  You report the housing allowance and your qualified expenses in the Turbotax interview.  The housing allowance is always subject to self-employment tax, but it is excluded from income tax as long as your qualified expenses equal or are more than your housing allowance.

 

There is no procedure to deduct a housing allowance from your box 1 wages if it was improperly included by your church.  Your church needs to issue corrected W-2s.

 

Any procedure someone told you in Turbotax, or anything you guessed at, is probably wrong.    The only thing that might work is filing with a substitute W-2 (form 4852) but this will almost certainly lead to an investigation.  And if you entered your W-2 AND you entered a housing allowance when asked, you paid too much self-employment tax, because the housing allowance question is not a subtraction, it is an addition.

 

I suggest that you and the church need to meet with a qualified accountant who understands clergy and church tax filing.  If your HA is included in box 1, your church needs to file corrected W-2s, and you need to take another look at your 2023 return because it is almost certainly wrong.   Wait to file your 2024 return until you get the corrected W-2, even if that means getting an extension. 

 

 

I find this organization to be particularly useful.

https://www.ecfa.org/TaxGuides/?trk=public_post-text