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Deductions & credits
This is a complicated situation.
First, not all of your mileage is deductible, as discussed at your other post.
Second, if you are a common-law employee, even if you did not get a W-2 because all your income was housing allowance, you can't deduct any mileage because of the changes in the tax reform law of 2018. The fact that you have to tell turbotax you are self-employed in order to trigger the housing allowance question when you did not get a W-2 does not actually make you self-employed. Most pastors are common-law employees and are subject to all the laws and rules for W-2 employees even if they don't get a W-2 because all their compensation is declared as a housing allowance. Your status as employee or independent contractor is determined by your relationship to the church. In brief, if you answer to a body of any kind that can set your working conditions or fire you (such as by church vote, or by a board of elders, decons, a staff-parish committee, finance committee, etc.) then you are an employee.
Third, because all your income is housing allowance and you have no taxable income, you can't deduct any work-related expenses even if you were an independent contractor and even if the tax reform law of 2018 did not happen, because of the Deason rule. The Deason rule is an adjustment to your work-related expenses, whether you are a contractor or employee. You can only deduct the percentage of your expenses that is related to taxable income. For example, if you received a $10,000 housing allowance and a $20,000 salary, then 33% of your income is non-taxable housing allowance, and that means that you can only deduct 67% of your work-related expenses. If your compensation is entirely a non-taxable housing allowance, then 0% of your income is subject to income tax and therefore under the Deason rule, 0% of your expenses are deductible.
Fourth and finally, even if you are an employee and even if your compensation is all housing allowance, you can deduct your mileage from your income subject to self-employment tax, and this is not subject to the Deason rule. For example, if you received a $10,000 housing allowance and a $20,000 salary, you will have a Schedule SE that calculates and pays self-employment tax on your entire compensation of $30,000. Suppose you had 100 miles, worth $57.50 for 2020. You could only deduct 66% of that, or $38.52, from your income subject to income tax, but you can deduct the entire $57.50 from your income subject to self-employment tax.
However, this requires making a manual adjustment on the schedule SE worksheet that can only be done using the Turbotax Desktop version and not the online version. In the desktop version, you click the Forms icon to change to Forms mode, then locate the Schedule SE Adjustment Worksheet, and enter your work-related expenses on Part II, line 5c "clergy business deductions." You will have to determine the value of your expenses yourself (mileage at 57.5 cents per mile, books or other supplies, other unreimbursed expenses.). Remember not all miles are allowable business expenses, review publication 463. Also note, making any manual entries voids the accuracy guarantee. And lastly, note that the IRS instructions say that in this case, you should file by mail and attach a written statement listing your work-related expenses and describing your Schedule SE adjustments. (You don't attach proof, just the statement, but keep proof for at least 3 years.). If you e-file without the written explanation of the adjustment, the IRS may send you a letter asking for more details.
You should read this
https://go.efca.org/resources/document/preparing-tax-returns-clergy
So you need to go back and remove all your expense deductions from the personal deduction section because of the Deason rule and the fact that all your compensation is housing allowance. Then, you may need to switch to Turbotax installed on your own computer if you want to make the adjustments to schedule SE. you can buy a CD or download directly from Intuit or from many other reputable retailers. Once you have installed Turbotax on your own computer, use this procedure to download your data file and transfer it from the web site to the desktop application.
