First, read this article Clergy Housing Allowance
When you receive a Form 1099-MISC Box 7 and not a W-2, Enter the 1099-MISC as business income. 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. Continue through the business interview and enter your 1099-MISC.
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
- Scroll to Business Income
- Start or Update
- Use the information above to complete your return. (see image attached).
Your housing allowance is not reported on any tax document. If your housing allowance is reported in box 7, the church needs to issue a corrected 1099-MISC. The 1099-MISC should only report your taxable wages, not including the housing allowance.
