Retirement tax questions

As a retired credentialed minister, the IRS allows you to deduct a housing allowance from distributions from your 403(b) retirement account. You will be able to exclude the part of your retirement designated as your rental allowance or the rental value of your home including utilities that is furnished to you by your church as a part of your pay for past services. You still need to adhere to the housing allowance rules. Please see the IRS Frequently Asked Questions for Ministers who receive a housing allowance and IRS Topic #417 Earnings for Clergy for more information regarding rules.

Check your 1099-R Box 2b to determine which way you will enter your housing allowance into TurboTax.

If Box 2b of your 1099-R is checked by taxable amount not determined, you will need to calculate the taxable portion by deducting the allowable housing expenses from Box 1.

1. Launch TurboTax.
2. Select Federal, then type in 1099-R in the search box at the top by the magnify glass.
3. Select Jump to 1099-r.
4. Answer the questions to enter your 1099-R, stop at Box 2a to calculate the taxable amount.
5. Deduct your allowable housing expenses from the amount in Box 1 and enter that amount in Box 2a. If your housing expenses are more than the amount in Box 1, enter zero in Box 2a.
6. Continue answering the questions until you finish,

If Box 2b of your 1099-R is not checked, you will enter your 1099-R exactly as it and make an adjustment for your allowable housing expenses.

1. Launch TurboTax.
2. Select Federal, then type in 1099-R in the search box at the top by the magnify glass.
3. Select Jump to 1099-r.
4. Answer the questions to enter your 1099-R. Once you finish answering the questions and are back at the Wages & Income screen, scroll down to Less Common Income and select Miscellaneous Income.
5. Scroll down to Other Reportable Income and select Start
6. Answer Yes to Did you receive any other taxable income? 
7. Type in Clergy Housing Allowance under the description.
8. Enter your allowable housing expenses as a negative number (use a minus sign in front of the number). This will remove your housing expenses from your taxable income.

For additional information, please review the TurboTax article Misters and Taxes.