The "Deason Allocation": since a certain percentage of clergy income is tax-free (housing allowance), correspondingly the same percentage of expenses allocable to the tax-free income cannot be deducted from Sched. C. IRS directions say that - once adding up all expenses - the minister is to deduct that percentage of expenses on line 27 of Sched. C. This deduction of expenses, of course, would be a negative number. (e.g. a minister has $1,000 of total expenses added up on lines 1-26, but since 25% of his income is tax free, he must deduct $250 from that total on line 27a. , thus reducing his total deduction to a net of $750 in expenses).
In the past, TurboTax always allowed me to put that negative number on line 27a, but his year it won't. It says that the program cannot allow a negative number on line 27a.
Therefore, how now do clergy reduce their total expenses on Sched. C for the Deason Allocation - especially since IRS directions explicitly say to reduce those expense on line 27a (Pub. 517, pp. 10 & 15)
