If ordained and serving in the clergy field, the norm is the issuance of a 1099 NOT A W-2.
There are a number of congregations which don't seem to understand this as they issue W-2 to church employees and clergy are employees...right? Not under IRS rules. Even mainline churches (e.g. many small Episcopal Church churches in spite of constant guidance) get this wrong.
Now under the 1099, the housing allowance is not subject to IRS tax but the whole of the housing allowance (see rules) and salary is taxed under social security (unless having filed for exemption -- see rules for timing here).
If a mileage allowance is involved, arrange for a contractual mileage allowance against which you submit a monthly mileage report. This way, the mileage received is not reported on the 1099.
If at all possible don't get the mileage allowance as a benefit---the computation for deductibility is horrid.
The bottomline question is--is the filer ordained and working in an IRS recognized religious institution?
