This income is taxable to you.
Pastors fall under the clergy rules. They are considered a common law employee of the church so although they should receive a W2, (some churches are still issuing 1099-MISCs) their income is reported in different ways.
- The salary from the 1099-MISC is reported on the Schedule C and must be included for self employment tax.
- Money received from weddings, offerings, special events outside their church would be reported on Schedule C for self employment.
- Housing allowance is not reported as income for personal income tax but is included for self employment tax.
- Expenses related to the salary are deducted as miscellaneous job related expenses on itemized deductions.
- Expenses relating to other income reported on Schedule C would be entered on that schedule.
Be sure to select the clergy option when entering the W2 and TurboTax will do all the calculations.
- Click here for clergy income and expense information.
- Click here for clergy information from the IRS.
For other details on how you enter clergy income see the information below.https://ttlc.intuit.com/replies/3850695