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Partial Year Housing Allowance
My husband started 2019 as a normal W2 employee at a church and was ordained and became a clergy in August. He then started a housing allowance and paying self employment tax. I received a W2 from the church. How do I account for the change halfway through the year in turbo tax? I don't see an option.
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Deductions & credits
After you enter the W2 information, look for the screen below. It will ask you the questions to enter your housing allowance and self-employment tax. Did the W2 have the boxes 3-4-5-6 completed for the partial year?
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My main question is, I've read online that it matters that 1/2 of the year was normal W2 income and the other 1/2 of the year was clergy. A previous post said to enter two different W2s but that seemed really messy to me.
Boxes 3-6 were completed for the entire year I believe.
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Yes, you are correct~that would be messy, and is not recommended. You can be clergy and receive Form W-2 and/or Form 1099-MISC.
For your husband's income, I recommend you begin by entering the Form W-2 exactly as he received it.
- To enter this in TurboTax: How do I enter a parsonage or housing allowance reported on a W-2?
For the self-employed portion of his earnings he received, you can trust TurboTax to help you capture the details, including some or all of the following:
- Housing allowance:
- Income from the church: Is my clergy income subject to the self-employment tax?
- Earnings from individuals for baptisms, weddings, and funerals: Reporting self-employed income and associated expenses.
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I did this but it will not let me file.
It says: Housing W2 box should not be checked if social security or Medicare tax has been withheld on this W2.
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Your best option at this point is to request that the church issue corrected W-2 Forms.
You should ask the church to separate the income during his employment as an employee onto 1 W-2 Form.
The other W-2 should show his housing allowance and his income earned after he was ordained.
You will then be able to enter both W-2s into TurboTax.
For the W-2 where he is an employee, you would NOT check the box when it asks if he was a member of the clergy.
On the W-2 form which is for his time as an ordained minister, you would select that he was a member of the clergy. You will then be prompted to enter your housing allowance and fair market value of your expenses.
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