Follow these steps:
- Return to the W-2, edit
- Continue
- Marking the w2 as religious employment
- continue
- select Clergy on the next screen
- continue
- Enter parsonage or housing allowances and expenses
- continue
- Screen Now tell us about your clergy self-employment taxes, select the correct answer
- continue
Once you have fully finished entering the w2 information above, the correct forms will be created for you to finish your return.
You fall under the clergy rules. The Self Employment tax is exempt if you have an approved Form 4361.
- The salary from the W2 is reported on the form 1040.
- Money received from weddings, offerings, special events outside their church would be reported on Schedule C for self employment.
- Housing allowance is not reported as income for personal income tax but is included for self employment tax.
- Expenses related to the salary are deducted as miscellaneous job related expenses on itemized deductions - not between 2018-2025 for the federal, they may be allowed on your state.
- Expenses relating to other income reported on Schedule C would be entered on that schedule.
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