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New Member
posted Jan 7, 2020 4:27:24 PM

Why does my refund drop almost 3000 after I enter clergy housing allowance

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3 Replies
Level 15
Jan 7, 2020 6:51:29 PM

First the "refund-o-meter" is only correct when you have entered all your income and expenses so until you are done you should ignore it.   Next, when you enter taxable income without any withholding against it the tax bill will go up naturally ... and it also affects refundable credits.   To see how review the return before and after this entry to see exactly how it happens.   

New Member
Jan 10, 2020 6:36:44 PM

Clergy housing is the most frustrating part of my taxes EVERY year!  Here's an excellent TurboTax article (that actually links to two separate articles) if you live in a parsonage:

 

https://ttlc.intuit.com/community/business-taxes/discussion/how-do-i-enter-clergy-housing-allowance/00/193502

 

Following the steps listed will (correctly) charge you SE tax on housing allowance, but NOT federal tax.

Expert Alumni
Jan 13, 2020 4:01:29 PM

Housing allowance that is greater than either  the fair rental value or actual expenses, does create income. It is important to be as accurate as possible when claiming your housing allowance to avoid having taxable income created. On the other hand, there are many components to the expenses and entering the information correctly is critical. @revcheek gave a good link for help on entering the expenses.

 

The IRS has Topic No. 417 for Clergy. For more information, click on the blue link.