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Need help with clergy section of taxes

Hi guys, I had a few questions regarding the clergy section of taxes. 

 

Under "Parsonage or housing allowance received" my housing allowance was entered in.

 

  1. Can I add my total yearly utilities into the "Qualifying expenses" section? My utilities was paid out of pocket.

I get paid Salary, and I don't pay medicare or social security 

  1. Do I pay self-employment tax on my wages and housing allowance or just my housing allowance?

 

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4 Replies
DianeW777
Expert Alumni

Need help with clergy section of taxes

Yes, you can include the cost of your utilities as part of your housing expenses to eliminate paying personal income taxes on excess housing allowance.  

  • IRS Topic 417  -  A minister who receives a housing allowance may exclude the allowance from gross income to the extent it's used to pay expenses in providing a home. Generally, those expenses include rent, mortgage interestutilities, and other expenses directly relating to providing a home.

 

You must select to pay self-employment tax on your wages and housing allowance unless you have previously filed for exemption.

 

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Need help with clergy section of taxes

"Generally, those expenses include rent, mortgage interestutilitiesand other expenses directly relating to providing a home."

 

So I use my housing allowance to cover all of my rent and I pay out of pocket for my utilities. 

 

Does that mean that I can also include my rent along with my utilities in the "Qualifying Expense" section?

 

So IE: 

"Parsonage or housing allowance received"

$20,000 (Box 14)

 

"Qualifying Expense"

$20,000 (Total Yearly Rent) + $Utilities. 

Need help with clergy section of taxes

Does anyone one have any more thoughts on this?

DaveF1006
Expert Alumni

Need help with clergy section of taxes

Yes, according to this link from IRS.gov,  "a minister who receives a housing allowance may exclude the allowance from gross income to the extent it's used to pay expenses in providing a home. Generally, those expenses include rent, mortgage interest, utilities, and other expenses directly relating to providing a home. The amount excluded can't be more than reasonable compensation for the minister's services."

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