I think you may need to enter a Line 21 adjustment for the excess housing allowance. But the problem could also lie in Step 5, below. The housing allowance has always been complicated, and mistakes are easy to make anywhere along the way. Please review all of these steps. They should lead you to the correct result.
If you're not already on the W-2 entry screen, open your return.
(To do this, sign in to TurboTax and click the orange Take me to my return button.) Then
search for "W-2" or "W2" (lower-case also works) and
click the "Jump to" link in the search results. Follow the
instructions to import or manually enter your W-2.
- When
you get to Box 14, enter CLERGY HOUSING, followed by the amount, and
then select the last item in the drop-down which is Other - not
on the list above.
Click Continue.
- If you get additional
screens, answer those questions.
- When you reach the Do any of
these uncommon situations apply to this W-2? screen, check the 4th box for Religious
employment, then
click Continue.
- On the following screen,
select You earned this income for clergy employment and click Continue.
- Enter your allowance on
the Tell Us About your Clergy Housing screen. For Qualifying
Expenses, enter
the lesser of:
- Your qualified housing
expenses;
- The fair rental value of
your housing expenses; or
- Your housing or parsonage
allowance. (Housing allowance – qualifying expenses = taxable income)
Click Continue, and on the Clergy
Self-Employment Tax screen,
select the appropriate option and click Continue again.
You will now be on the Here's
your W-2 info screen. Click Edit to
view your W-2 information. If the
Box 1 amount hasn't been adjusted for your housing allowance, enter a Line 21
adjustment to income. Here's how:
- Search
for "other reportable income" and then click the "Jump
to" link in the search results.
- Answer No to Did you
receive any other wages? and click Continue.
- Scroll all the way to the
bottom of the Let's Work on Any Miscellaneous Income screen and click Start next to Other
reportable income.
- Answer Yes, and on the Other
Taxable Income screen,
type Clergy Housing Allowance in the description and enter it as a
negative number (precede it with a minus sign, e.g. -10,000).
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