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)?
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.
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.
{edited: 2/8/2023 | 9:12 AM PST}
@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.