You may see only the short SE schedule however TurboTax will incorporate the self employment tax on your clergy W2 and housing allowance. Use the information below to enter your clergy W2 and/or self employment as well as your housing allowance.
If you are paid through a W2, the housing allowance can be entered by using the steps below. Housing allowance should not be included in the box 1, gross wage amount.
- Sign into your TurboTax account (online or desktop version)
- Use the search box, upper right
- Search for clergy or W2
-
Jump to clergy or W2 (both take you to the W2 entry)
- Complete the W2 entry
- Continue to the screen "Do any of these uncommon situations apply to this W2?"
- Select Religious Employment
- Follow the screens to complete the process for paying your social security and medicare taxes.
- See the image attached for assistance.
If you are using the self employment business section or you were paid on a Form 1099-MISC, you should be sure to use the appropriate business code to enter the housing allowance amount.
For the principal business code, use 813000 (religious organization). After you enter that business code you will get a screen about clergy income. Select "I Need to Pay Self-Employment Tax on This Income." The next screen will ask you to enter the amount of your housing allowance.
You can go directly to the area to begin to enter your income and expense for your pastoral self employment.
- Select the Federal taxes tab (Business tab in Self Employed Online or TurboTax Home & Biz Desktop)
- Select Wages & Income (Business Income and Expense)
- Scroll to Business Income
- Start or Update
- Use the information above to complete your return. (see image attached).
The wages, housing allowance and any self employment income are used for SE calculations as follows:
- Example of self employment tax calculation: Self employment
tax: $3,000 x .9235 x .153 = $424
- .153 x .50 = .0765 // 1 - .0765 = .9235
To review your Form 1040 for the self employment tax you can use the following steps:
To use this tool while you are signed into your TurboTax account (online) follow the steps here.
- Select My Account in the upper right
- Then select Tools
- Choose View Tax Summary
- Select Preview My 1040 above
- Scroll to line 57 to check the self employment tax
- Click the image attached to enlarge and view for assistance.
To use this tool while you are signed into your TurboTax account (desktop).
- Select Forms in the upper right
- Then select 1040, in the forms tree on the left
- Scroll to line 57 to check the self employment tax
- Select Step-by-Step to return to the interview
- Click the image attached to enlarge and view for assistance.
