Clergy and Schedule C

[Gen_Joab]

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_Joab]

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]

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}

[Opus 17]

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@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)?

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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.