@mlynch1 wrote:
My husband is in a temporary pastoral situation and receives a 1099-NEC,
I have deducted his expenses under the 1099 self employed deductions.
Am I still able to use the Self-Employee Tax deductions under the Business Tax and Deductions? Under the Job Related Expenses?
He did not receive a W-2 for Pastoral Income this year
Thank you for your help
Generally speaking, a pastor who is paid via 1099-NEC and files a schedule C can deduct work-related expenses according to the same rules as other self-employed persons. However, if part of the pastor's compensation is a non-taxable housing allowance, the business expense deduction must be reduced by the non-taxable part of their compensation. For example, if a pastor receives a cash salary of $25,000, but $10,000 is designated as a housing allowance and only $15,000 is reported on the 1099-NEC, then the pastor can only deduct 60% of their work expenses, because only 60% of their income is subject to income tax. Turbotax does not do this calculation, you must do it yourself. Technically, you are required to file by mail and attach a worksheet that documents your calculations. If you e-file, make sure you save your calculations in case of audit.
More on clergy taxes here, https://go.efca.org/resources/document/preparing-tax-returns-clergy
