If you don't have a W2, you will need to report your parsonage housing allowance as a Schedule C Business to pay your portion of FICA taxes:
- Federal
- Income and expenses
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Self-Employment
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Self-employment income and expenses
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Next you will enter a brief profile regarding your business. It may not seem like a business to you but it is for tax reporting purposes. For a code, use 81300 Religious Organization.
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In the income section, you can indicate this is other income.
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You can claim out of pocket expenses against your allowance in maintaining your home to lower the tax burden. Things like utilities or repairs but not for basic living such as consumables like food or paper products for your own personal use.
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You can deduct out of pocket expenses that directly relate church expenses however.
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