Clergy and Schedule C

Forum|Forum|3 years ago
February 7, 2023
3 replies
52 views

As clergy, I am entitled to deduct business deductions on my Schedule C; however, since I have a housing allowance, I have to subtract the percentage of expenses that is allocable to tax-free income (i.e. my housing allowance). In the past, I always did this in TT simply by inputting a negative number on the "Misc. Expenses" line of Schedule C. Now, however, TT won't allow me to put in a negative number; I get an error message saying "Other expenses must not add up to a negative number." So how do I perform the "Deason Allocation" (i.e. back out that percentage allocable to my housing allowance)?

Gen_JoabAuthor

Level 3

As a follow up, I experimented with other lines on Schedule C, and TT will permit me to enter a negative number on other lines, so why not for line 48? As a work-around, I supposed I could simply enter the Deason Allocation on a different line and label that it's actually for the allocation.

Cynthiad66

Alumni - Intuit

The easiest way to accomplish this is to simply reduce the expenses by the percentage. You will need to keep good records on how it was calculated.

@Gen_Joab

{edited: 2/8/2023 | 9:12 AM PST}

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Opus 17

Level 15

@Gen_Joab wrote:

As clergy, I am entitled to deduct business deductions on my Schedule C; however, since I have a housing allowance, I have to subtract the percentage of expenses that is allocable to tax-free income (i.e. my housing allowance). In the past, I always did this in TT simply by inputting a negative number on the "Misc. Expenses" line of Schedule C. Now, however, TT won't allow me to put in a negative number; I get an error message saying "Other expenses must not add up to a negative number." So how do I perform the "Deason Allocation" (i.e. back out that percentage allocable to my housing allowance)?

You may not deduct employee-related expenses on schedule C, you can only deduct expenses that are allocable to the schedule C income. You must do the Deason adjustment yourself. If you have 500 miles and your Deason percentage is 50%, enter 250 miles. If you have $1000 in meals and your Deason adjustment is 50%, enter $500, and so on. Don't use negative numbers. Keep separate records of how you calculated the adjusted values in case of audit.