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Returning Member
posted Apr 17, 2024 12:52:46 PM

Member of a religious order who must pay self-employment tax including Housing Allowance which is excluded from Income tax

His box one of his w-2 does not include the Housing Allowance regarding the Self-Employment tax,  He must pay S/E on the Housing Allowance how to enter in the 

turbo tax program to reflect it being taxed for S/E.  I did check the box indicating Religious Employment.  What is the answer?

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1 Replies
Employee Tax Expert
Apr 17, 2024 1:48:51 PM

There are a couple more steps you need to take (check box 14 and answer the follow-up questions) to get his self-employment tax reported on your tax return.   Follow the steps in the FAQ below and reply here if you have any issues.   There are follow-up questions after the screen where you marked religious employment that will generate the SE Tax form.   

 

W-2 with parsonage allowance

 

If the amount is not included at all, you can manually add the self-employment tax.   To access the Schedule SE section in TurboTax:

 

  1. Open (continue) your return if it isn’t already open.
  2. Inside TurboTax, search for sch SE and then select the Jump to link in the search results.
  3. On the Self-Employment Tax screen, select Make Adjustments.

If you need to adjust Schedule SE, enter your income and expenses beforehand.

 

It is important to know that a clergy person is not allowed the special housing allowance if the church has not previously designated an amount for it in writing.  Although the excludable portion of clergy housing isn't subject to federal income tax, you'll still have to pay self-employment taxes on it.    IRS - Ministers' Compensation & Housing Allowance