Yes, you need to keep your receipts for the housing expenses. The IRS allows a housing allowance to retired ministers to the extent the recipient can justify the amount. Should you receive more than you can justify, the excess should be considered taxable.
You do not have to make any entry if you paid in expenses for your housing more than you received from the church as a housing allowance.
- Actual housing expenses (including mortgage payments, utilities, property taxes, insurance, furnishings, repairs and improvements); or. The fair rental value of the home (furnished, including utilities).
If you believe you received more in housing allowance than you can show in expenses you can report the excess using the steps below.
- Open your Federal return and choose Wages and Income
- Scroll down to Less Common Income and Show more
- Choose Miscellaneous Income, 1099-A, 1099-C
- Scroll to choose Other reportable income, and Start/Revisit
- Select Yes and you will be prompted to enter Description and amount. Enter the description "Retired Minister Excess Housing Allowance," and enter the amount.
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