I have a letter from my church recording my Housing allowance which is 100% of my compensation ($2200) How do I enter it since - as it is not my business income? Mileage: I often must drive to the church for police activity, trash removal, plumbing etc. that is not my ministerial duties-is that deductible as a business mileage expense? I also use my device to do live streaming each Sunday-does that change the mileage deduction status? Please forgive all of the questions. I am trying to give you content for my questions thank you.
813000 is the correct code for entering the housing and allowance. To enter the housing and allowance you will still go through the Schedule C if you did not receive a W-2. Follow these steps to enter the housing and allowance:
Generally, a love offering will not be tax-deductible to the giver. When the giver knows that a gift will go to a specific person, the tax law treats the gift as if it were being made to the specific person. It will be nondeductible, even when handled through a church. You don't need to report the gift as income on your tax return.
See link below for more information on love offerings:
1. To enter your housing allowance you have to answer all of the questions with the w2. Follow these steps:
Once you have fully finished entering the w2 information above, the correct forms will be created for you to finish your return.
2. Mileage related to church trash, plumbing, etc are all due to the management position at the church. You may be able to get reimbursed by the church or be able to delegate those duties to someone else. Those are job related expenses and not deductible at the federal level.
3. Driving to work is not a deduction. Live streaming is not related to driving.
Be sure to select the clergy option when entering the W2 and TurboTax will do all the calculations.
You fall under the clergy rules.
I received $5509.57 as a minster's housing allowance on a 1099-MISC. How do I enter this using TurboTax Deluxe 2021?
First, read this article Clergy Housing Allowance
When you receive a Form 1099-MISC Box 7 and not a W-2, Enter the 1099-MISC as business income. For the principal business code, use 813000 (religious organization). After you enter that business code you will get a screen about clergy income. Select "I Need to Pay Self-Employment Tax on This Income." The next screen will ask you to enter the amount of your housing allowance. Continue through the business interview and enter your 1099-MISC.
You can go directly to the area to begin to enter your income and expense for your pastoral self-employment.
Your housing allowance is not reported on any tax document. If your housing allowance is reported in box 7, the church needs to issue a corrected 1099-MISC. The 1099-MISC should only report your taxable wages, not including the housing allowance.
Hello Amy
I am reading your response to this person and I see this statement
In Turbo tax there are two questions one is Enter parsonage or housing allowance. the other is to enter actual expenses.
I entered my housing allowance on the first (parsonage or housing allowance) and left the 2nd empty. When I was finishing up and Turbo reviewed it took me back to that form and asked me to put an amount in the second question asking for actual expenses. So I just put the same info, my housing allowance in there. Then what I owed in tax went way down. So did I just take two housing allowances by doing that and if so which question do I fill out with my actual housing allowance? I believe I only need to put my housing allowance down right? Actually, my board allowed more than my expenses. So I decided to take $400 less in housing allowance. If that helps you with answering. Where do I put the amount on both lines or just one? Thank you!
You do enter amounts in both boxes typically. The first box you enter the housing allowance you actually received. This will be added to your income on form 1040, line 1h as other income "excess housing allowance." That is, at that point, taxable income. In the second box you enter your actual expenses for housing. This will remove the income from taxable income lines (1h).
Next, the housing allowance and your clergy wages are subject to self-employment taxes and are added to the Schedule SE. You will be asked questions to determine the self-employment taxes due. For example, if you have an approved form 4361 or if social security and medicare have already been withheld. The answer to those questions may remove amounts from the Schedule SE as applicable.
Mark I would like to click as the best answer but there is only one that says Mark it as new. But this really helps thankyou!!
Hello, thank you for your time. Last year I had only to put 813000 for the business then follow the prompts- Then add only Housing Allowance, then select adjustments- then use my mileage and other deductions to reduce my tax liability. This year, though I do have a small love offering- The process is different, I even worked forward and looked for other tax situations and still could not find Housing Allowance. Should I just go to forms and look? Also, there will be no taxable overage - my church is very small and my housing allowance was $4070. Just my mortgage alone would cover that.
813000 is the correct code for entering the housing and allowance. To enter the housing and allowance you will still go through the Schedule C if you did not receive a W-2. Follow these steps to enter the housing and allowance:
Generally, a love offering will not be tax-deductible to the giver. When the giver knows that a gift will go to a specific person, the tax law treats the gift as if it were being made to the specific person. It will be nondeductible, even when handled through a church. You don't need to report the gift as income on your tax return.
See link below for more information on love offerings:
Thank you very much! I discovered that my issue was that the cash accounting method was not selected. Once I did that edit, then the box generated for the additional data. The information for the love offering was icing on the cake! I did not know the difference was in the gift being given to the church or to the individual! Wow! what an eye opener! Thank you!
@DMarkM1 I’m so glad I found this answer. I also wanted to know, how does one determine the self-employment taxes due? There is no form 4361 and no social security and medical taxes were withheld. Would the “pay self employment taxes on wages” select or housing allowance or both?
thank you
You would select both, you do need to pay self-employment tax on the housing allowance. The housing allowance is not included in gross income.
Please see this IRS FAQ about the subject and IRS Publication 517 for additional information for Members of the Clergy.
Hello!
A housing allowance is the only compensation received right now and is not reported on any form. When entering the info, the screen with the housing allowance only shows one box, not two. What do we need to correct so we can enter the actual housing allowance, then actual expenses? Thanks!
To enter the housing and allowance you will go through the Schedule C if you did not receive a W-2. Follow these steps to enter the housing and allowance:
Housing allowance is excludable from gross income for federal and state income tax purposes but not for self-employment tax purposes. When a portion of compensation is received as housing allowance, federal and state taxes are directly reduced.
If your housing expenses does not exceed the housing allowance, you do not have to report it. However, if you have excess housing allowance that is taxable as Self Employment income on Schedule C as stated above.
Hello!
For some reason, after I enter the 813000 code for clergy in the Business section, only 1 box comes up concerning housing allowance. The following “interview questions” do not give any options to enter expenses in order to show excess amount on which to pay self-employment taxes. I am using the Home and Business download. I would appreciate more specific info on how to enter this as “interview questions” didn’t lead where I needed.
Thanks!
After you enter Business Code 813000, you are asked if you use the 'Cash Method' for accounting (Yes), and about 'Uncommon Situations', (none), then you should get a screen to 'Confirm your Business Info.'
The next screen will have a listing of Business Topics. Go to the Business Expenses section to enter your expenses.
Since you're using TurboTax Desktop, you can also view Schedule C in FORMS mode, and make entries directly on the form.
This question is for BrittanyS on this same topic: I have exactly the same issue - no W2, no 1099, received pastoral housing allowance.
But I am using Turbotax Home & Business desktop - and on the business tab, I cannot find any place to "add a business". I've clicked around all over the place but can't seem to find that.
I am familiar with the process of adding a business and then the 813000 code. I just can't seem to find where in the product I can start that workflow?
Did you try “explore on my own” under the Business tab? Once you click that, you should see a section “Business Income and Expenses”. From there it should give you access to add a business and continue.
Hope this helps!
Thank you for answering.
Under Business/explore on my own, I just don't see any option for adding a business. I've gone in circles in that section and it just keeps walking me through my existing businesses under these 5 categories and then says: "that's all!"
Try the Business income and Expenses tab. It will ask interview questions to generate a Schedule C for self Employment.
I see no way to get to that screen from the Business tab - it just goes in circles with the same 5 categories of already existing businesses.
@Cynthiad66
The Business income and Expenses tab is what I am on. What am I missing?
Please clarify your question. Are you trying to add 6 businesses to your TurboTax account ?
There might be some limitations if this is what you are trying to do.