@jkrause wrote:
Another use case, help is greatly appreciated.
Wife is member of clergy. She was paid $30k for housing allowance, our qualifying expenses are $10k. We live in our own home and pay mortgage.
Should Parsonage or Housing allowance be: 30k? or 20k (30k-10k)?
Qualifying Expenses should be 10k, right?
Are your expenses really only $10,000? Your housing expenses include:
- Fair rental value of the home (what it would cost to rent a similar home in the same neighborhood in similar condition
- Utilities
- Property taxes
- Furnishings
- Food spent entertaining church members, hosting dinners and small groups, etc.
(Note that your mortgage payment is not a qualified expense, instead, you use the fair rental value.)
If your expenses really are less than the housing allowance, the excess housing allowance is added back to your taxable income.
See this for more.
http://www.ecfa.org/PDF/MinTax_Preparing_2019.pdf
