I thought about just adding it as "misc income" but then I can't designate it as exempt from self-employment tax (I have form 4361).
Every other minister out there should be facing this same issue if their QE is less than their HA, right?
Tell me more about your situation and I can probably come up with some workarounds.
So, my issues is that I need to make sure that my "unused" housing allowance (HA-QE) is accounted for. On top of that, I need to make sure that this "income" is not taxed for self-employment because I am exempt.
Your housing allowance is always subject to SE tax. Wages and the non-qualified part of the housing allowance are also subject to income tax.
If you go to My Account / Tools / Tax Summary / Preview my 1040 you should see that your form 1040 line 7 income includes both your box 1 wages and your non-qualified housing allowance with a comment in the margin. Your SE tax is on line 57 and should be roughly 15% of your entire housing allowance plus wages.
Unfortunately, turbotax online restrict access to the forms until after you pay and you can't directly view the forms and worksheets to check situations like this. That's one of the reasons I prefer turbotax installed on my own computer.
Also be aware there is another bug affecting calculation of clergy SE taxes on housing allowance. It doesn't affect everyone but seems to be limited to turbotax online and is another reason to think about buying the desktop program this year. You can read more about it here. https://ttlc.intuit.com/questions/3531386-is-there-a-bug-in-the-way-schedule-se-is-being-handled-for...
If you;ve never read this its a very good guide. http://www.ecfa.org/PDF/2016-Preparing-Tax-Returns-For-Clergy.pdf
Still have questions?Make a post