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deidre
New Member

I'm a pastor & receive my housing allowance in box 14 of blank W2 Can I deduct my housing exp's to offset my housing allowance by entering that on a Sch C or form 2106?

I receive my housing allowance reported in box 14 of an otherwise blank W2. Can I deduct my housing expenses to offset my housing allowance by entering that on a Sch C or on form 2106? I realize I won't pay income tax on it, but can the self-employment taxes be mitigated/netted by my housing expenses or does the gross amount need to be subject to self-employment tax? thank you!
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LinaJ2018
Intuit Alumni

I'm a pastor & receive my housing allowance in box 14 of blank W2 Can I deduct my housing exp's to offset my housing allowance by entering that on a Sch C or form 2106?

As an employee minister, you can deduct the extra actual housing expenses amounts exceeds your housing allowance on a Form 2106.  You will not enter that on the Schedule C which is for ministers who received a Form 1099-MISC or self employed.  The housing allowance income is not subject to income tax but will be subject to Self Employed tax.  ( whether it's a W-2 or 1099)  The housing allowance expenses cannot be used to reduce any SE tax.  

For example, if you have housing allowance of $10,000, related expenses $12,000.  Your housing allowance is not taxable, you can deduct the $2000 on Form 2106, but your full $10,000 is till subject to SE tax. 

I am attaching the following instructions how to enter your housing allowance amount so that TurboTax program will only calculate the SE tax on your housing allowance. 

https://ttlc.intuit.com/replies/5412425

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